Hedge funds have a constant, daily need to make informed buy, sell, or hold decisions, creating a clear business problem that data solves. Corporations often lack this frequent, high-stakes decision-making cycle, making the value proposition of external data less immediate and harder to justify.

The AI boom is fueled by 'club deals' where large companies invest in startups with the expectation that the funds will be spent on the investor's own products. This creates a circular, self-reinforcing valuation bubble that is highly vulnerable to collapse, as the failure of one company can trigger a cascading failure across the entire interconnected system.

History shows pioneers who fund massive infrastructure shifts, like railroads or the early internet, frequently lose their investment. The real profits are captured later by companies that build services on top of the now-established, de-risked platform.

The popular theory that the market for raw data would explode has not proven correct. The number of companies buying data has not grown significantly, and in some sectors like hedge funds, it has even shrunk. The boom in data-oriented roles has not translated to a boom in data purchasing.

The historical information asymmetry between professional and retail investors is gone. Tools like ChatGPT and Perplexity allow any individual to access and synthesize financial data, reports, and analysis at a level previously reserved for institutions, effectively leveling the playing field for stock picking.

For the first time in years, leading-edge tech is incredibly expensive. This requires structured finance and massive capital, bringing Wall Street back to the table after being sidelined by cash-rich tech giants. The chaos and expense of AI create a new, lucrative playground for financiers.

Dalio envisions a future where AI platforms provide sophisticated tools directly to individual portfolio managers, much like Uber's technology empowers individual drivers. This will enable talented managers to operate independently, challenging the current multi-strat model that aggregates PMs within one firm.

The future of financial analysis isn't job replacement but radical augmentation. An analyst's role will shift to managing dozens of AI agents that perform research and modeling around the clock, dramatically increasing the scope and speed of idea generation and validation.

The dominance of passive, systematic investing has transformed public equities into a speculative "ghost town" driven by algorithms, not fundamentals. Consequently, financing for significant, long-term industrial innovation is shifting to private markets, leaving public markets rife with short-term, meme-driven behavior.