Firms like OpenAI and Meta claim a compute shortage while also exploring selling compute capacity. This isn't a contradiction but a strategic evolution. They are buying all available supply to secure their own needs and then arbitraging the excess, effectively becoming smaller-scale cloud providers for AI.

The tech business model has fundamentally changed. It has moved from the early Google model—a high-margin, low-CapEx "infinite money glitch"—to the current AI paradigm, which requires a capital-intensive, debt-financed infrastructure buildout resembling heavy industries like oil and gas.

Hyperscalers are selling their own securities (stocks, bonds) to fund a massive CapEx cycle in physical infrastructure. The most direct trade is to mirror their actions: sell their securities and buy what they are buying—the raw materials and commodities needed for data centers, where the real bottlenecks now lie.

Tech giants are shifting from asset-light models to massive capital expenditures, resembling utility companies. This is a red flag, as historical data shows that heavy investment in physical assets—unlike intangible assets—tends to predict future stock underperformance.

Companies like Tesla and AWS are investing in lithium and copper refining to control their supply chains, a new phase of vertical integration driven by AI's massive industrial needs for data centers and batteries.

While costs for essentials like copper and electricity are rising, cash-rich hyperscalers (Google, Meta) will continue building. The real pressure will be on smaller, capital-dependent players like CoreWeave, who may struggle to secure financing as investors scrutinize returns, leading to canceled projects on the margin.

The AI buildout is forcing mega-cap tech companies to abandon their high-margin, asset-light models for a CapEx-heavy approach. This transition is increasingly funded by debt, not cash flow, which fundamentally alters their risk profile and valuation logic, as seen in Meta's stock drop after raising CapEx guidance.

Driven by AI and EV demand, tech giants like Tesla and AWS are moving beyond software to control their supply chains at the source. They are now investing in and operating mines and refineries for critical minerals like lithium and copper, marking a new era of deep vertical integration.

The huge CapEx required for GPUs is fundamentally changing the business model of tech hyperscalers like Google and Meta. For the first time, they are becoming capital-intensive businesses, with spending that can outstrip operating cash flow. This shifts their financial profile from high-margin software to one more closely resembling industrial manufacturing.