The key question is whether AI valuations are supported by fundamentals. Public market valuations for hyperscalers have contracted due to doubled earnings growth, while private markets show isolated froth in early stages.

The focus is on where we are in the value chain. Value has accrued to infrastructure (semiconductors, hyperscalers, utilities), but we are on the precipice of moving to the application layer (software as a service to services as software). Sees meaningful opportunity in private companies but requires selectivity.

AI does not show signs of a bubble based on four criteria: no excess capacity being built, valuations justified by fundamentals, no excess leverage. The investment cycle has years to go because the economy is still compute and power constrained, with data center vacancy at multi-year lows and demand outstripping supply.

The macroeconomic environment has shifted post-2022. Inflation will peak mid-next year but stay above Fed target, leading to 'higher for longer' rates amid moderating growth. Portfolio building blocks must shift to ensure durable returns, emphasizing inflation protection.