We are officially witnessing the biggest wave of infrastructure investment in modern US history.
Total investment in data centers and AI infrastructure is projected to average 3.63% of US GDP per year from 2025 to 2032, the highest proportion among major infrastructure buildouts since the 1800s.
The previous largest investment, railroad infrastructure, represented 2.24% of GDP per year in 1870-1890.
This was followed by highway investment that averaged 1.13% of GDP in 1956-1973, while telecommunications and fiber infrastructure averaged 1.10% in 1996-2003.
By comparison, electrification stood at just 0.50% of GDP in 1905-1925, while canal investment accounted for 0.66% in 1836-1841.
This comes as AI and data-center infrastructure investment is projected to total ~$10.3 trillion between 2025 and 2032.
The AI buildout is the largest infrastructure investment in modern US history.
NVIDIA CEO claims we’re entering the low IQ era, where children won’t even need to learn basic math skills.
“Children are forgetting skills such as long division and multiplication.. skills may become more important”
Non-asset owners are very worried about inflation.
The 3-month moving average of 1-year inflation expectations among US consumers with no stock holdings hit ~5.0% in August, near the highest level this year.
This is significantly above the ~3.0% recorded in late 2024.
Meanwhile, the 3-month moving average of inflation expectations among US consumers with the largest stock holdings remained below 4.0% last month.
Readings for both groups were roughly in-line with levels seen in late-2022, following the recovery from the energy crisis.
Asset owners are the only winners in this economy.
Without the Iran War, the S&P 500 could be at 9,000+.
The S&P 500 has added +$700 billion in market cap today even as Brent crude oil prices near $100/barrel.
This is arguably the most resilient market in history.
The S&P 500 is now less than 1% away from a record high despite inflation nearing 4%, gas prices back on the rise, and the Fed expected to HIKE rates.
Just imagine where the S&P 500 would be if the Iran War ended, oil prices came back down, and rate cuts returned.
Earnings growth just over the last 6 months of the Iran War has been historic, with the S&P 500 posting +52% blended earnings growth in Q2 2026.
This marks the highest growth rate since Q2 2021, a period where the global economy was emerging from a historic lockdown and the US government handed out $4 trillion in stimulus.
In other words, we are now seeing growth on-par with $4+ trillion in stimulus and a global economy that restarted from an effective halt.
The reality is that the AI narrative is even stronger than most people realize, the earnings growth is there to support it, and inflation has been above 2% for 60 consecutive months.
Own assets or be left behind.