Tech's Capital Explosion and the Chip Shortage Paradox
Source: Ben Evans
The industry is simultaneously experiencing runaway capex spending on AI infrastructure while facing persistent chip supply constraints. AI adoption has outpaced semiconductor manufacturing capacity. As foundational models commoditize, competitive advantage shifts from owning the model to controlling the compute and supply chains that deliver it. Companies like TSMC and cloud providers gain outsized leverage over AI developers. This structural imbalance is expected to persist for 18+ months, creating a two-tier market where well-capitalized players can afford to build their own infrastructure while others face rising chip costs and limited access.