The Next Wave

A massive wave of innovation and investment opportunity is coming - and it will be driven by the nexus of four key technologies: AI, Crypto, Compute, and Energy.

Technical progress has been happening individually for some time, but we’re now entering a convergence era that will see mass adoption and capital accretion across all four.

Here's how I see this playing out...

Much has been written about how “AI will eat the world”. Regardless of whether you are in the hype camp or the real use case camp, one thing is certain, AI as a technology is here to stay.

As corporate and geopolitical AI arms race heat up, consumers will benefit from access to better and cheaper AI models.

Better access will further drive AI demand, as more businesses start to use AI in daily workflows across retail, distribution, defense, transportation, industrial, biotech, healthcare, and various other sectors.

AI use cases will mature beyond novelty and gimmicks...

...and unlock massive market opportunities like autonomous robotaxis, accelerated drug development timelines, and software engineering automation.

In the future, AI will become the de facto superior way to perform most, if not all, complex cognitive tasks. Similarly, the technology behind crypto and blockchain will become the superior way to store, program, and transmit economic value.

After a decade of working in the shadow of hostile regulatory environments, the digital asset and blockchain industry finally has a clear path to growth and adoption, driven by the new Executive Order.

As crypto and blockchain technology enters mainstream adoption, we will see many disruptive innovations start to take hold.

Payments, asset tokenization, new financial markets, app stores for decentralized applications, and greater integration between AI and Crypto to run blockchain nodes and enable data sovereignty will be a few of the many practical use cases.

To meet this imminent and unstoppable digital demand we will need a massive supply of computing power and sustainable energy.

The recent spate of investments in chip manufacturing supply chains, data center capacity, and improved energy infrastructure will further commoditize the critical resources that are needed for AI and Crypto.

As the supply of input resources becomes cheaper and abundant, the downstream cost of running AI and Crypto will come down, driving even more adoption. Jevons paradox at play!

We will also see positive domino effects on traditional industries like distribution, logistics, mining, minerals, specialty materials, fabrication, and various ancillary sectors along the compute and energy supply chains.

Innovations in infrastructure will also lead to better compute resources (going from silicon chips to quantum computing) and sustainable energy (going from hydrocarbons to nuclear, wind, solar and hydrogen) in the long run.

Where are the opportunities?

A few years ago, I highlighted in one of my posts that with the right innovation engine in place, it would be only a matter of time before we embark on the next technology revolution that will reshape our world.

In 2025, that revolution is finally here!

The nexus of AI, Crypto, Compute, and Energy.

This imminent wave of innovation and disruption will not only reshape our world, but also also create numerous opportunities for investment and wealth creation.

Where and how to invest in the next wave will depend on personal preferences, risk tolerance, conviction, and time horizon.

MARKET OUTLOOK

Artificial Intelligence

• As an investment theme, AI will continue to dominate the next 5-10 years.
• The obvious choice to get AI exposure are the niche technology companies, as well as the widely known big tech players, that are either directly developing AI products or embedding AI into their existing offerings.
• The second category for AI exposure are companies that may not necessarily be classified as AI companies, but are still an AI play for the long term. Some of the EV manufacturers developing self-driving technology are in this category.
• AI will also have massive impact across various traditional industries, so a third category are companies that rapidly adopt AI to gain a competitive advantage. Ranging from drug discovery and genomics in healthcare, to using AI and robotics in manufacturing and logistics - every industry will need to rethink their business model.

Crypto / Digital Assets

• As the digital asset markets mature with improvement in regulatory clarity, new products in this asset class will soon become available widely to investors.
• For now, derivative products like Bitcoin and Ethereum ETFs provide spot price exposure to the top two assets in this class by market capitalization.
• Crypto market exposure is also available through publicly traded companies in the digital asset industry including Bitcoin miners, crypto exchanges and corporations holding Bitcoin in treasury.
• For those who don't mind the technical learning curve of crypto, there is also the option of buying and holding the assets directly through cryptocurrency exchanges and self-custody wallets.
• Accredited investors can also allocate capital to private crypto funds for actively managed digital asset portfolios, early-stage opportunities and diversification.

Compute / Data Centers

• Despite recent pullback in the chip fabrication sector due to the release of compute and energy efficient DeepSeek R1 model, the long-term demand for computation resources will continue to outpace supply.
• Data center and computing infrastructure demand will remain the mainstay as long as software and cloud services keep being used in both consumer and enterprise use cases.
• Innovative developments in quantum computing offer a new paradigm in data storage and processing with the potential to disrupt the entire computing industry.
• Companies working on QaaS (quantum as a service) could serve as a good speculative bet on the eventual commercialization of this technology.

Energy Infrastructure

• Energy is a broad industry that has transformed the course of humanity over the last few centuries and has remained a perennial theme in investing.
• In the last century alone, various new sources of energy have been unlocked - first fossil fuels, followed by diversification to nuclear, hydropower, and now other renewable technologies - to keep up with our growing demand.
• The new era of electricity demand, fueled by computation and data center needs, will need to be supplied by energy producers across the sector, ranging from traditional to emerging players.
• Exposure to the energy sector can be found through investments in traditional Oil and Gas incumbents, but also innovative new providers who are developing and scaling-up sustainable energy options such as nuclear, hydrogen, and solar.

DISCLAIMER: The information provided in this article is for general informational purposes only and does not constitute financial, investment, or professional advice. Please conduct your own research and consult with a qualified financial advisor before making any investment decisions.