In a horse race, one horse wins and the rest don’t. The bookmakers get paid either way, and so do the track and the local tax authority. That’s the seat we want to be in as investors.
Some of the best AI businesses don’t sell AI at all. They’re selling cooling equipment, power equipment and energy generation: companies such as Vertiv, Eaton, Vistra and NextEra, which do business with AI companies and hyperscalers and get paid as the buildout continues. We’d rather back the suppliers that win no matter which model comes out ahead.
Key points
- Trying to pick which AI product wins is like trying to pick the winning horse.
- The more durable seat is the one that gets paid regardless of who wins, like the bookmaker or the track.
- In AI, that often means cooling, electrical equipment and power generation rather than the end-user model.
- Examples in this short include Vertiv, Eaton, Vistra and NextEra.
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