When Money Has to Choose
AI Capex and the First Real Scarcity Market in a Decade
Markets didn’t rise for ten years because ideas were brilliant.
They rose because money was cheap, plentiful, and bored.
Now money is busy—and suddenly, everything else looks expensive.
How it started
The post-2010 market regime trained investors to believe capital would never run out. If something didn’t work, funding would eventually arrive. Valuations got silly? Liquidity would soften the landing. Productivity slipped? A good story could cover the gap.
That world was built on an unusually capital-light engine.
Web 2.0 and SaaS thrived on talent, code, and smart distribution - not heavy industry or big balance sheets. After you built the software, scaling up was cheap. Cash piled up faster than companies could put it to real use, so it drifted into long-term stocks, private investments, and wild bets. Money was idle.
AI changed everything.
This cycle does not monetize ideas first and infrastructure later. It reverses the order. Intelligence now requires compute, energy, memory, fabrication capacity, and physical redundancy—paid for upfront, at scale, and continuously. Every incremental unit of progress consumes real capital before it produces cash flow.
Now, it’s not software eating the world on the cheap. It’s infrastructure, and it wants payment up front. And when money’s no longer lying around with nothing to do, markets don’t all go up together anymore.
