The $1 Trillion AI Buildout | State of Markets

Eight of the top ten valued companies in the world are US tech companies.

Since ChatGPT came out almost four years ago, the market's up ninety percent, which is seventeen percent annualized. The natural instinct is, "Well, that's gotta come down." We're definitely in a hot period.

This puts us in a new age of atoms. Global infrastructure investment needs are estimated at ninety trillion dollars through twenty-forty. This goes way beyond AI and data centers. It includes power, water, roads, transit.

Live deployments at S&P five hundred companies, that's at sixty-nine percent. Now, if you go to the ultimate barometer, which is a metric tracked over time, that's actually only at two percent. AI is generating major revenue and savings. On the other hand, adoption is still extremely early.

Today's opportunity is so much around taking these capabilities and harnessing them to build reliable services.

That's all great, but is it a bubble?

Um.

Um.

Um.

AI is driving one of the largest investment cycles in modern history. But is the spending getting ahead of the economics? Today, David George, Sarah Wang, Santiago Rodriguez, and Alex Emerman walk through twenty-five key charts from our latest State of the Markets presentation. They start with the macro picture, why markets have risen even as multiples have come down, how hyperscaler CapEx is approaching one trillion dollars a year, and why demand for compute continues to exceed supply. Then they look at what's happening inside businesses. AI adoption is growing, but measurable enterprise impact is surprisingly early. At the same time, power users are pulling away, agents are consuming more tokens, inference costs are falling, and the fastest-moving companies are finding ways to turn those improvements into both growth and better margins. And finally, they look at what comes next, from consumer agents and robotics to autonomy, AI, and biology, and the next wave of enterprise adoption.

Welcome back to the a16z Podcast. I'm David George. I'm here with my colleagues Sarah Wang, Alex Emerman, and Santiago Rodriguez. Today, we are walking through twenty-five key slides from our latest State of Markets presentation. The earnings behind the market's rise, the scale of the AI build-out, the evidence of growing adoption, and what this cycle means for hardware, software, and the next generation of private companies. We'll explain what the charts show and discuss what we're seeing inside businesses along the way, so you can follow along whether you're watching or listening. So Sarah, Alex, Santi, thanks for joining me.

Of course.

Glad to be here.

Okay, so the day this podcast goes live, we will be releasing our State of Markets presentation. So this is a now yearly tradition from our growth team, where we synthesize the biggest trends in tech, AI, infra, and markets. Today, we're just picking out a subset of interesting slides and having a discussion about them, so I would direct you to look at the whole version, which is filled with a lot of nuggets. The areas that we're gonna discuss today are macro, so where we'll talk about CapEx, data centers, accelerating demand at a high level, and then on-the-ground takeaways, where