Semiconductors outperform software in AI transition
The guest argued that the 'long semiconductors, short software' spread serves as a proxy for the market's belief in AI, pricing in massive compute demand against software disruption.
The argument
The guest noted that frontier model leaps like Mythos highlight cybersecurity vulnerabilities in existing software while driving an unprecedented scramble for physical compute. Proprietary GPU availability data, particularly for Nvidia's Blackwell chips, has flatlined at zero, confirming a tight supply chain that structurally favors hardware over software.
The thesis, stress-tested
✓ What validates it
- ✓Blackwell GPU availability remains at 0% on demand in channel checks
- ✓Semiconductor ETF (SMH) continues to outperform software indices
▸ Risks discussed
- ▸Software companies may adapt and monetize AI faster than expected
- ▸GPU supply constraints could ease suddenly, eroding the hardware premium
Hear it yourself
"I'm joined once again by Warren Pies, founder and CEO of three fourteen Research as well as Caliban. Warren, great to see you. Good to be with you, Jack. Warren, you write how the market is is dealing with kind of two wolves. What exactly are those those wolves? Maybe I'm too online, but I think of the, the meme that is all over social media. You know, there are two wolves inside of you. And it's just this, like, the old parable, like, you have two wolves inside of you, a positive wolf, a negative wolf, and whichever one you feed is the one that wins. And I just think of that when I see this market because I think there's really, like, two big forces at work in the market, and they're battling it out."
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