Investors worry about having less – I’m thinking about MOAR

Right now, many are focused on less – less demand for compute, less capex, fewer chips, weaker earnings.

I’m more interested in what happens if there is MOAR: the Mother of All Rotations. The idea that capital doesn’t disappear – it moves, from one part of the AI stack to another. That rotation won’t just reshape the winners within tech – it will also have knock-on effects across regions and markets.

As the potential for AI disruption has grown, so has the demand for certainty. Investors have congregated in the parts of the market where earnings are most visible.

Buying the picks and shovels of the AI trade made sense when monetization was still theoretical. But as evidence of real revenue builds the supply of certainty is increasing. This means the opportunity set can widen.

The next rotation won’t look like the last

That’s where MOAR comes in.

Do a rough back-of-the-envelope comparison and the set-up looks familiar. During the dotcom boom, US initial public offerings (IPOs) raised around $200 billion across 1999 and 2000 – about $380 billion in today’s money. But that was spread across hundreds of companies.

This time, the capital may be similar, but far more concentrated. SpaceX, OpenAI and Anthropic alone are expected to raise around $200 billion.

As these Godzilla listings hit major indices, investors may be forced to choose between tracking error and volatility. Passive funds, which most investors use, are optimized for the former. That could mean less liquidity – and less demand – for the rest of the index, particularly today’s winners.

Active managers won’t be immune. Funding new positions would likely come from profits already made in the AI trade.

This isn’t necessarily a rotation into technology – or out of it – but within it.

Where certainty moves, capital follows

Passive and thematic ETFs (exchange-traded funds), which have grown alongside the AI narrative, will need to adapt as the opportunity expands.

So where does that leave emerging markets?

Counterintuitively, I think they remain in a strong position. On the hardware and energy side, the same drivers of certainty still apply. And greater certainty at one end of the stack can reinforce demand at another.

The risk, in my view, sits elsewhere. Hyperscalers without proprietary models might struggle to translate investment into returns, even as models themselves gain traction. This creates a widening certainty gap.

Emerging markets, by contrast, largely sit on the right side of that divide. They also benefit from a more stable domestic investor base in places like Korea and Taiwan, reducing sensitivity to global index rebalancing.

And importantly, they’re not tied to a single ecosystem. Exposure spans both the Western AI stack and a fast-developing Chinese tech stack, where capital flows can be supported by policy. 

The point?  MOAR doesn’t mean AI fails – it’s what happens if it succeeds. 

The IPO pipeline suggests supply is rising. If certainty follows, the opportunity set broadens – and flows should follow too. The real question is how investors respond.

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