Quality worst year ever in 2025
The 'fundamental stability' factor — a proxy for quality — has performed worse year-to-date in 2025 than at any point in MSCI EM history.
Snapshot · Excess Returns
Finding Quality Growth in Emerging Markets with Ian Smith
Explore episode
Jun 22, 2026
Where this was said
AI capex, picks and shovels, and EM supply chains
At 19:20 · chapter starts 18:37
Ian Smith discusses how the AI capex buildout is reshaping EM indexes, why picks-and-shovels is still the right place in the cycle, and why the $750B capex trajectory implies an inevitable fade. [1] — Ian Smith "Six major tech companies will spend around $750 billion on AI capex this year, growing 80% year-over-year. Extrapolate that to 2030 and you…" 21:10 [2] — Ian Smith "Investors are confusing the flow of new equipment orders with the growing stock of equipment already installed. For long-duration power inf…" 24:15
The $750 Billion AI Capex Surge — And Its Inevitable Fade
Six major tech companies will spend around $750 billion on AI capex this year, growing 80% year-over-year. Extrapolate that to 2030 and you get $8 trillion from just those companies. That can't happen — capex will fade, and investors need to be positioned for when it does.
$750B hyperscaler capex in 2026
The big 3 hyperscalers plus Meta, Oracle, and CoreWeave are expected to spend roughly $750 billion on AI capex in 2026, growing 80% year-over-year.
$8 trillion capex by 2030 (if linear)
If current AI capex growth rates were sustained linearly to 2030 for just 6 companies, the cumulative spend would reach $8 trillion — which Ian Smith says is clearly unsustainable.
Flow vs. Stock: The Coming Capex Trap for Long-Duration Equipment
Investors are confusing the flow of new equipment orders with the growing stock of equipment already installed. For long-duration power infrastructure lasting 20–40 years, when the buildout ends, demand for new equipment can collapse to near zero even while the installed base keeps growing.
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