Welcome to the first edition of the AI Investment Brief from Exponential View.
In today’s Monday edition, we’ll cover:
AI Cycle Status: Are revenues covering today’s infrastructure costs, and how much growth does committed investment require? We also assess valuations and funding quality to gauge the potential “blast radius” if things go wrong.
The AI economy in September: What corporate earnings calls tell about AI’s business impact.
The paper that matters this week: How automation could reshape wages and where tax policy comes in.
On Wednesday, members will receive our analysis of 2030 required revenues and the implications for data center demand.
Reply with questions you’d like us to address.
Please see important disclosures here.
AI Cycle Status
Coverage of AI capital in service: Annualized AI revenue divided by the cost of capital in service (depreciation + OpEx + 15% ROIC) – the AI data centers currently in operation by hyperscalers and neoclouds, excluding future commitments and construction in progress (CIP).
Growth required by committed capital: Given capital commitments (12- & 24-month), what infrastructure (hyperscaler + neocloud) revenue CAGR is required throughout the life of the compute equipment to fully cover costs (depreciation + OpEx + 15% ROIC).
