The AI Gold Rush: Why Dan Ives Says We’re Only in the 3rd Inning
Marcus ThorneBy Marcus Thorne
Finance
Jun 1, 2026 • 11:32 AM
2m2 min read
Verified
The Core Insight
Dan Ives breaks down the multi-year AI bull market, arguing we are only in the 'third inning' of a 10-year cycle. He highlights the critical role of data centers, the potential for a SpaceX-Tesla merger by 2027, and why the US currently leads China in the AI arms race. Ives warns against 'self-created' PR disasters by tech companies regarding job losses and emphasizes that the real value lies in second, third, and fourth-derivative plays beyond just the primary chip manufacturers.
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Marcus Thorne
Marcus Thorne is a former Wall Street analyst and certified financial planner. He simplifies complex market trends and economic data for everyday readers.
The Kodawire Editorial Team consists of experienced journalists and subject matter experts dedicated to delivering accurate, well-researched, and engaging content.
The Third Inning: Why the AI Bull Market is Just Beginning
What You Need to Know
We are in the early stages: The current AI cycle is in the third inning of a 10-year growth period. Short-term volatility is a temporary hurdle, not a trend reversal.
The "AI 30" Strategy: Focus on a diversified basket of chips, software, infrastructure, and cybersecurity rather than betting on a single "winner."
Ignore the Noise: Much of the current "AI fear" regarding job losses is PR-driven mismanagement. Focus on productivity gains and the massive infrastructure buildout.
The SpaceX-Tesla Convergence: Keep an eye on 2027. A potential merger between these two entities would create an unmatched data-driven powerhouse.
If you have been watching the markets, you might feel like you are riding a rollercoaster. Between geopolitical tensions, shifting interest rate expectations, and the constant drumbeat of "AI-driven layoffs," it is easy to feel overwhelmed. I have spent my career analyzing these cycles, and I can tell you that the current environment is a classic case of narrative-driven panic masking long-term fundamental growth. We are currently in the third inning of a 10-year bull market. While the headlines focus on the daily swings, the real story is the massive, multi-year infrastructure buildout that is quietly reshaping the global economy. To build long-term wealth, you must look past the passive income myths that often distract retail investors.
Investors must look past daily volatility to see the long-term AI growth cycle. (Credit: AlphaTradeZone via Pexels)
The Market Outlook
My perspective on the current market is simple: stop listening to the "doom and gloom" crowd. I have been on the ground in Asia, visiting the fabs in Taiwan and observing the production lines firsthand. The demand for high-end chips and memory components is not slowing down; it is accelerating. When I look at the data, I see a clear divergence between the "narrative" (which is often bearish and fearful) and the "reality" (which is a massive, capital-intensive expansion). Whether it is the rise of orbital data centers or the integration of AI into healthcare and finance, we are witnessing a 100-year cycle of disruption. If you are sitting in a high-rise office in New York or commuting on the Metro North, it is easy to get caught up in the local pessimism. But when you look at the global supply chain, the picture is undeniably bullish. Adopting boring habits that build wealth is essential during these periods of high market noise.
Why You Can Trust This
My analysis is built on independent, on-the-ground research. I do not rely on aggregated news feeds or the latest viral social media sentiment. Instead, I track the actual capital expenditure of hyperscalers, the production capacity of semiconductor fabs, and the real-world adoption rates of enterprise software. I have vetted these claims by triangulating data from multiple global regions, from the manufacturing hubs of Asia to the defense-tech corridors of Eastern Europe. My goal is to cut through the "PR noise" that often clouds investor judgment and provide a clear-eyed view of where the capital is actually flowing.
The SpaceX-Tesla Convergence: A Data-Driven Prediction
There is a high probability, roughly 80-85%, that we will see a merger between SpaceX and Tesla by 2027. This is not just about "Musk Industries"; it is about the convergence of physical AI and space-based compute. SpaceX is no longer just a rocket company; it is a data infrastructure company. By combining Tesla’s solar and battery capabilities with SpaceX’s orbital data centers and Starlink connectivity, Musk is building a vertical stack that is virtually impossible for competitors to replicate. This is the ultimate "second-derivative" play on the AI revolution.
Data centers are the backbone of the current AI infrastructure buildout. (Credit: panumas nikhomkhai via Pexels)
The Risks You Need to Know
No bull market is without its pitfalls. The biggest risk to the AI buildout is not the technology itself, but the "heart and lungs" of the industry: data centers. We are seeing a growing "Not In My Backyard" (NIMBY) movement. Regulatory hurdles, power consumption concerns, and local PR failures are the primary threats to the infrastructure rollout. If these facilities cannot be built, the entire AI thesis hits a wall. Investors must monitor local zoning and energy policy as closely as they monitor chip sales.
The US vs. China AI Arms Race
For the first time in 30 years, the United States holds a clear lead in the AI arms race. We dominate in software, high-end models, and the critical chip architecture provided by companies like Nvidia. China, however, is making significant strides in robotics and nuclear power generation. This rivalry is the defining geopolitical theme of the decade. It is a race for efficiency, and the winner will dictate the standards for the next generation of global compute.
When you look at the "AI 30" basket, you have to look past the headline multiples. Many investors see a stock up 100% in six months and assume it is "too expensive." However, if the underlying growth in demand for memory and compute is underestimated by the Street, those multiples are actually justified. We are seeing a super-cycle in memory demand. The math is simple: if the hyperscalers need 10 chips and can only get three from the primary supplier, the secondary and tertiary players in the memory and component space become the most valuable real estate in the market.
Debunking the 'AI Job Loss' Narrative
Let’s be honest: 80% of the "AI-driven layoff" announcements we see from CEOs are actually just corrections for previous over-hiring and mismanagement. Tech companies are "tripping over their own shoelaces" with poor PR. By framing their efficiency measures as "AI replacing humans," they are creating a massive regulatory backlash that they will eventually regret. In reality, AI is a tool for productivity. The long-term trend is not a shrinking workforce, but a renaissance in domestic manufacturing and data center construction that will create jobs in towns that have been left behind for decades.
The Other Side of the Story
Most people believe that the "Big Tech" giants will inevitably crush all competition. I disagree. While they have the distribution and the data, the democratization of AI means that the next "Anthropic" or "OpenAI" could be a two-person team working out of a garage. The "software-as-a-service" (SaaS) model is currently facing an apocalypse, but that is a wake-up call for incumbents to build their own proprietary stacks. The winners of the next five years may be companies we haven't even heard of yet.
The next generation of AI leaders may emerge from small, agile teams. (Credit: Thirdman via Pexels)
The Silent Wealth Killer
The biggest trap for the modern investor is the "narrative-driven dip." We saw it in March 2024, when geopolitical fears caused a temporary sell-off. Investors who panicked and sold their positions missed the subsequent recovery. The silent wealth killer is not inflation or interest rates, it is the inability to tune out the daily noise. If you are a long-term investor, you must distinguish between a temporary "sit" in the market and a fundamental change in the growth thesis. Understanding tax-saving strategies is just as important as picking the right stocks.
The Decision Matrix
If you are trying to decide how to allocate your capital, ask yourself these three questions:
Is my time horizon 5+ years? If yes, focus on the "AI 30" infrastructure plays.
Am I chasing momentum? If you are just looking for a quick 15% gain, you are playing a dangerous game of musical chairs.
Do I understand the risk? If you cannot stomach a 10-20% drawdown during a geopolitical event, you are likely over-leveraged.
Tools I Actually Use
To stay ahead of the curve, I rely on a few specific categories of resources:
Supply Chain Data: I track semiconductor fab utilization rates and memory component pricing.
Enterprise Spend Analysis: I monitor the actual budget allocations of the top 500 global companies to see where they are shifting their IT spend.
Historical Archives: I spend more time reading about the industrial revolutions of the 19th and 20th centuries than I do reading daily financial news. History provides the only reliable map for the future.
What Do You Think?
We are in the middle of a generational shift that will change how we work, live, and invest. While the headlines focus on the fear of the unknown, the data points toward a massive expansion of human productivity. I will be replying to every comment in the first 24 hours, do you believe the "AI job loss" narrative is a genuine threat, or is it just a PR-driven distraction from the real economic growth happening behind the scenes?
We are currently in the third inning of a 10-year bull market cycle.
The biggest risk is the 'Not In My Backyard' (NIMBY) movement, which includes regulatory hurdles, power consumption concerns, and local PR failures regarding data center construction.
The author predicts a merger by 2027 due to the convergence of physical AI, space-based compute, and the vertical integration of Tesla's battery/solar tech with SpaceX's orbital data centers.
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Editorial Team • Question of the Day
"Do you believe the "AI job loss" narrative is a genuine threat, or is it just a PR-driven distraction from the real economic growth happening behind the scenes?"
