The AI Platform Shift

AI is a general-purpose platform shift that will move investment value from standalone software toward the physical infrastructure, trusted data systems and workflows that enable organisations to deploy AI at scale.

• From 2015 to 2025, the MSCI ACWI Information Technology Index returned about 25% annualized versus roughly 13% for the MSCI ACWI, but technology suffered an 80% peak-to-trough decline in 2000–2002 and recorded 16 drawdowns above 10% over the past 20 years, compared with 7 for global equities.
• AI adoption is unfolding in sequence: infrastructure investment is already visible through capacity additions and capital expenditure, while productivity gains depend on slower organisational changes involving governance, incentives, data access, employee adoption and workflow redesign.
• The proposed stack gives strategic importance to semiconductors, equipment, advanced packaging, memory, cooling, networking and AI-optimised cloud systems, where physics, long qualification cycles, installed bases and hyperscale relationships can create durable moats.
• As AI enters production, data governance, security, identity, policy enforcement and incident response become critical control points, while application software must evolve from graphical interfaces and seat-based pricing toward APIs, agents, governed delegation and outcome-based consumption.
• The opportunity also extends to edge and industrial applications in factories, supply chains, vehicles and connected devices, but the authors caution that commodity memory, undifferentiated compute rental and businesses without customer lock-in or network effects may suffer from oversupply and weak returns.

Takeaway: Investors should favour companies whose competitive advantages strengthen as AI deployment scales across physical infrastructure, trusted data and mission-critical workflows, while remaining selective because the technology's end state is uncertain and growth alone does not guarantee value creation.