Too Much Compute: Why This Top Hedge Fund Manager Believes AI is Heading for a Massive Oversupply | David Orr

This episode is brought to you by Sarmaya Partners. Learn more about Sarmaya’s LENS ETF, their full data and comparison, including performance here: https://sarmayaetf.com/

In this episode of Other People's Money, Max Wiethe sits down with Militia Capital founder David Orr to discuss the recent unwinding of the massive AI infrastructure and semiconductor trade. Orr explains his contrarian thesis that AI compute is rapidly heading for a massive oversupply because the physical world will take years to catch up with our new abundance of digital intelligence. The conversation explores the deflationary impact AI will have on white-collar jobs, how it threatens the moats of major software companies, and the potential for a societal shift back toward hands-on physical trades. Finally, Orr shares his perspective on the downside protection offered by hyperscalers and how he is managing his fund's net exposure during a volatile market environment.

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Timestamps:

00:00 Intro

01:30 AI Trade Unwinds

05:58 CapEx Drives Glut

08:13 Software Correlation

09:42 Hyperscalers Advantage

14:39 Sarmaya LENS ETF

16:59 Antitrust And Search

21:18 Physical Bottlenecks

26:02 Demand Narratives Shift

27:14 White Collar Automation

32:20 The Impact on Skilled Labor

34:25 Software Moats and Deflation

38:31 Back to Physical World

44:53 Social Media Moats Debate

51:45 Market Exposure Wrap Up