State of Frontier AI
Where the AI dollar actually lands — June 2026, US-first, ETFs first-class, bull and bear
Own the picks-and-shovels and the few labs with real revenue durability; rent the application layer, don't marry it.
Concentrate exposure where the economics are proven and defensible: Nvidia and the compute/power complex (the layer actually collecting cash today), plus the two labs with genuine revenue durability — Anthropic (enterprise/coding, ~$45B ARR and capital-efficient) and, for public-market access, Palantir and Databricks (both growing 65-85% with real or near-breakeven economics). Avoid paying frontier-lab prices for the application layer, where API price collapse (~90%+ since 2023) compresses margins and most "agent" companies are renting someone else's model; SSI (no revenue, $32B), a richly-priced OpenAI (~-122% operating margin), and single-model wrappers are the avoid/size-down list. For diversified vehicles, AIQ and BOTZ give the cleanest US-tilted compute-and-robotics exposure but are Nvidia-concentrated — that is a feature here, not a bug; treat ROBO as the lower-volatility equal-weight alternative. Not financial advice.
No durable single-lab monopoly; a stable oligopoly at the frontier (Anthropic + OpenAI + Google) with credible challengers (Mistral, SpaceX (xAI)) and an open-weight floor. Frontier capability is NOT commoditizing — the gap on hard reasoning, agentic tool-use, and frontier coding persists — but mid-tier inference IS, fast. The durable monopoly-like rents sit one layer down at Nvidia/TSMC and at the power grid, not at the model. Bet on the labs that convert capability into sticky enterprise revenue (Anthropic on coding/enterprise; Palantir/Databricks on data+ops), not on whoever holds the benchmark crown this quarter.
Full-stack value chain
Eight layers, scored on durable margin capture — not growth. The dollar pools at the bottom (compute, power) and a thin revenue-durable top; the middle commoditizes.
Durable margin capture concentrates at the physical bottom of the stack (compute at ~75% Nvidia margins, power as the new binding constraint with multi-year scarcity) and at a thin top tier of labs and apps with proven enterprise revenue and data/workflow moats (Anthropic, Palantir, Databricks). The middle — raw model APIs and commodity serving — is being competed to near-zero margin by a ~90%+ token-price collapse since 2023 and an open-weight floor 10-100x cheaper than frontier. The investment posture that falls out: own the picks-and-shovels (Nvidia, the Broadcom/custom-silicon and power/transformer supply chains) and the capital-efficient, revenue-durable names (Anthropic privately; PLTR/Databricks publicly or near-public; AIQ/BOTZ for diversified US-tilted exposure); rent the commoditizing middle; and size down or avoid pre-revenue moonshots (SSI), single-model wrappers, and richly-valued names with deeply negative operating margins until the net-revenue and margin path clarifies. The two catalysts that re-rate the whole board: whether the power bottleneck holds (it likely does through 2028) and whether custom silicon escapes internal hyperscaler use to crack Nvidia's frontier moat (not yet). Not financial advice.
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Opportunity board
Where to lean in vs rent — own the picks-and-shovels and the revenue-durable labs; rent the commoditizing middle; size down pre-revenue moonshots.
Durable compounder
4Undervalued / high-potential
4Short / avoid
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Full board analytics
The prediction matrix, scenario bands, regime timeline, book construction, premise tests and the shift-point register — the deep analytical layer behind this board.
- Prediction matrix & scenario bands
- Book construction & sizing
- Premise tests & falsifiers
- Shift-point register