I’ve been looking into Bridgewater’s recent 13F filings and the move by Ray Dalio to slash Alphabet and Meta holdings (by 40%+) feels like more than just a stock trade. It looks like a macro-level shift in how institutional capital is viewing the AI "build phase."
We’re seeing a massive rotation into the "Picks and Shovels" of the industry—Nvidia, Micron, and Oracle. From an economic perspective, this is fascinating for a few reasons:
CAPEX vs. ROI: Hyperscalers are projected to spend nearly $650 Billion on AI infrastructure by the end of 2026. We are seeing a massive "Capex Orgy" where the physical resources (power, chips, and space) are being hoarded before the software monetization is even fully proven.
Commoditization of AI Models: As open-source and competing models (like Claude 4.6) saturate the market, the "economic moat" of pure software models is shrinking. If the intelligence becomes a commodity, the only real scarcity left is the hardware it runs on.
The "Early Bubble" Infrastructure Peak: Dalio has pointed out that this mirrors the late 90s. Back then, the infrastructure giants (Cisco/Intel) peaked first because you can't have a digital economy without the pipes. It seems we’ve reached the stage where the "pipes" are more valuable than the data flowing through them.
Is this rotation into physical assets (chips, HBM, data centers) a hedge against a potential software bubble, or just a natural progression of the technology cycle?
Curious to hear the sub's thoughts on the long-term inflationary impact of this massive infrastructure spend.

The Great AI Rotation: Is capital shifting from Software to Physical Infrastructure?