Beyond the frontier labs: Fundies search for hidden winners across the AI stack
With some AI investors keeping powder dry for the impending megafloats of the frontier labs, fund managers and strategists warn against chasing headlines.
In the wake of SpaceX’s mega IPO and ahead of the potential trillion dollar floats of Anthropic and OpenAI over the next year or so, there has been growing talk of a “crowding out” effect in markets, whereby the giants of AI gobble up all the money and nothing is left for anyone else.
Yet while some investors see this as a risk for anything not developing a frontier model, others see it as an opportunity.
For example, ECP Asset Management portfolio manager Annabelle Miller tells Capital Brief that companies directly involved in developing AI and the associated infrastructure are “acting as a liquidity pull on everything else”.
“Anything that’s not directly an AI beneficiary is seeing its valuation contract…and sometimes this is unwarranted particularly if the fundamentals are relatively intact,” Miller said.
