Many investors vividly remember the dot-com bubble of the late 1990s. During that era, speculative websites with no revenue collapsed, wiping out billions in market value. However, the companies that built the physical infrastructure of the internet, like fiber optic cables, servers, and routers, did not disappear. Instead, they became the permanent foundation for the modern digital economy. Today, the artificial intelligence (AI) revolution is approaching a similar turning point.
AI valuations are soaring, but they depend on scarce and accelerating physical resources. Unlike the 1990s, when companies built too much fiber optic capacity (creating a glut), the AI era faces a critical shortage of physical inputs. We have plenty of code, but we lack sufficient reliable electricity to power the data centers and the necessary rare earth minerals to build the advanced hardware.
