RJ Hamster
AI Needs This, And You Don’t Own Enough
AI Needs This, And You Don’t Own Enough
Editor’s Note: AI is the single biggest tech boom since the dawn of the internet, with corporate spending as a percent of U.S. GDP already exceeding the dot-com peak.
But during past tech booms, many of the largest, most sustainable gains didn’t come from the companies building the software. They came from the companies supplying the infrastructure that made those technologies possible.
That’s why I asked my colleague Eric Fry from our sister company, InvestorPlace, to share his latest thinking with you.
Eric has spent decades studying the economic forces that drive major tech revolutions. And in his essay below, he shows why the next phase of the AI boom will be fueled by the critical supply-chain chokepoints that separate winners from losers.
He also shared this idea in more detail during FutureProof 2026, a free presentation that walks you through what’s going on – including 15 tickers of stocks tied to three supply chains that are set to be the next round of AI winners. Check it out here, and then read on for more from Eric…
BY ERIC FRY, EDITOR, FRY’S INVESTMENT REPORT
Sometimes, the direction of the global economy hinges on a single narrow passage.
A place where critical resources have to squeeze through a surprisingly slim opening.
This week, the world got a stark reminder of one of these critical passageways.
At its narrowest point, the Strait of Hormuz is just 20 miles wide.
Yet until very recently, nearly one-fifth of the world’s oil supply flowed through that tiny stretch of the Persian Gulf every day.
As we’re seeing right now, when shipping through the strait slows or stops, the consequences ripple across the entire global economy.
Oil prices spike. Energy markets react. And Wall Street starts paying very close attention.
That’s because when a critical system narrows to a single chokepoint, everything behind it becomes vulnerable.
And right now, something very similar is happening in artificial intelligence.
AI may look like a purely digital revolution. But beneath the software and algorithms lies a physical supply chain – one that’s beginning to strain under explosive demand.
The AI boom depends on enormous quantities of copper, electricity, and memory chips.
And today, all three are facing growing constraints.
In other words, the AI Revolution is running into chokepoints of its own.
Let’s walk you through these emerging bottlenecks, and I’ll show you why they could determine which companies win the next phase of the AI boom.
Because when supply gets tight, the companies controlling those chokepoints often become the most profitable businesses in the system…
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AI’s New Chokepoints
As explosive as AI is, it still has boundaries.
Artificial intelligence ultimately runs on physical inputs: raw materials, energy, and memory chips.
Right now, the world doesn’t have enough of any of them.
Let’s start with raw materials.
Demand for data centers, computing power, and electricity is exploding. But the copper, rare earths, magnets, transmission capacity, and the material supply chains needed to support that growth are constrained.
To sustain the current pace of AI expansion, we would need to mine as much copper over the next 18 years as humanity has mined in the last 10,000 years combined.
And the market seems to have figured this out.
Since 2025, copper investments have returned more than 100%.
Meanwhile, AI-focused hyperscalers like Amazon.com (AMZN), Meta Platforms (META),and Microsoft (MSFT) have averaged gains of just 1%.
And that’s just the beginning.
The next major bottleneck forming in AI is in energy.
Data centers are filled with expensive chips from companies like Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD).
But those chips must be powered the moment they’re turned on – or their value immediately begins to deteriorate.
In other words, power isn’t just important to AI growth.
It is AI growth.
Demand for power near data centers is already straining local grids. In some areas, electricity now costs up to 267% more than it did five years ago.
Meeting this demand will require an all-hands-on-deck approach – wind, solar, nuclear, natural gas.
The third bottleneck is memory, also known as DRAM, or Dynamic Random Access Memory…
Nvidia CEO Jensen Huang put it plainly: “The memory bottleneck is severe.”
Without enough DRAM, AI systems simply run out of room to process information.
And the shortage may persist for years.
Nearly 100 gigawatts of new data centers are scheduled to come online over the next four years. But there’s only enough DRAM to support roughly 15 gigawatts over the next two years.
Without memory, artificial intelligence quite literally can’t think.
So these bottlenecks are very real – and they will affect how the AI boom unfolds.
Some companies will struggle because of them.
But others will benefit…
The Companies Controlling AI’s Chokepoints
The companies best positioned to win in this environment aren’t purely digital businesses.
They’re the ones tied to the physical infrastructure behind AI.
Just look at the damage software stocks suffered recently.
Meanwhile, the companies producing AI’s essential building blocks are becoming increasingly valuable.
I’m talking about businesses involved in:
- copper mining
- power infrastructure
- fiber-optic components
- energy generation
- and memory manufacturing.
These aren’t flashy companies.
But they produce the tangible materials that keep the AI Revolution running.
And when supply is tight, companies controlling those materials can see their profits soar.
In fact, I’m tracking several companies that sit directly at the center of these shortages – and Wall Street still hasn’t fully priced it in.
That’s what we discussed at my event, FutureProof 2026. During this free presentation, I walked through each of these emerging bottlenecks in detail – and revealed the specific companies I believe are best positioned to benefit.
Only a small number of companies will benefit from this phase of the AI story.
Because when an entire system depends on a few narrow chokepoints – whether it’s oil flowing through the Strait of Hormuz or AI running on copper, electricity, and memory – the companies controlling those bottlenecks often become the biggest winners.
So, if you want to understand where the real opportunities may be forming, I encourage you to watch my presentation before it goes offline.
Regards,
Eric Fry
Editor, Fry’s Investment Report
