Had a chat with a fund PM friend who flies to Bay Area to attend the Hot Chips this week. A few months ago, he was one of the most bullish people I knew on AI semis. This week, he looked honestly confused and upset. He told me, maybe there’s no beta left in this sector. His biggest concern wasn’t supply chain, it was downstream demand. Specifically, Anthropic’s reported ARR. Some numbers floating around are way below what bulls expected, and if model revenue growth is slowing, the whole AI CapEx cycle gets questioned. But here’s the disconnect. He said that every time he talks to suppliers or people closer to the supply chain, it’s the opposite. Orders are strong, expansion continues, everyone close to the supply chain still sounds extremely bullish. My response to him was that this is indeed bearish noise short term before the Anthropic IPO as it’s guilty until proven innocent, but for the long term investors these feel more narrative driven than structural: I think Anthropic is managing the expectation before IPO, and the growth number conflicts among multiple sources and seasonality also muddies the ARR reads(don’t forget the ChatGPT DAU read last year) Even if Anthropic’s growth rate peaks due to the supply constraints it doesn’t necessarily mean the whole AI sector slows down in terms of the monetization (look at Codex’s insane WAU growth!) So, two coWe also talked about U.S. politics. There’s clearly more pushback on data centers around power, water, and noise. My take is that the market is probably overpricing that risk into midterms. assuming a real slowdown in build-out. I think that’s too pessimistic. My response to him was that these feel more narrative driven than structural. Management teams are cautious pre-IPO. Data sources conflict, and competition muddies simple ARR reads. Before midterms and the Anthropic IPO, sentiment could stay weak across semis and AI infrastructure. And after those milestones, we may finally get clarity on actual demand and political impact. If fundamentals hold, this stretch of uncertainty could end up looking like a buying opp.