The Case for and Against the Capex Supercycle

Sovereign and regional buildouts are becoming a demand source in their own right, driven less by economics than by the desire not to depend on someone else's cloud. That demand is price-insensitive and politically durable, which makes it a floor under accelerator orders that a pure ROI model would miss entirely.

Watch the depreciation schedules, not just the capex line. Hyperscalers are quietly extending the useful life they assign to servers, which flatters near-term margins even as the underlying hardware ages faster in AI workloads than the accounting assumes. When those schedules snap back to reality, the earnings hit arrives all at once.

The chip supply chain is quietly consolidating around a handful of chokepoints: advanced packaging, high-bandwidth memory, and leading-edge fabrication. Any one of these can gate the whole system, which is why capacity announcements from the packaging and memory vendors deserve as much attention as the accelerator launches themselves.