AI: The big disruptor and where smart money is moving

Artificial intelligence has long been talked about as a technology with enormous potential. What few expected, however, was the sheer speed at which it would evolve and make entire business models obsolete. That reckoning has arrived and is unfolding in real time across global markets.

From Buzzword to Business Reality

The past month has served as a compelling case study. AI has played a decisive role in software development, automating code generation and modernizing legacy systems. It fundamentally blurs the line between what an IT service provider does and what AI can now do on its own. The market responded quickly: IBM witnessed a staggering 13% erosion in market capitalization following reports that AI would automate the modernization of legacy programming languages ​​like COBOL. A loss of this magnitude had not been seen since the dot-com correction of 2000. This was not a bad day of profit. It was market price determination in a structural question about long-term relevance.

The middleman problem

The disruption extends far beyond technology. AI is now systematically targeting industries built on intermediation, the task of bridging the gap between a consumer and a service. Travel platforms like Expedia, Booking Holdings and Airbnb have built billion-dollar businesses by aggregating options and earning a commission for the convenience they provided. AI agents can now build entire itineraries, from flights, hotels, loyalty optimization to refunds, much faster and cheaper, bypassing these platforms entirely. Their role as an indispensable intermediary is eroding, and with it the pricing power that justified their valuations. The markets immediately reflected this, with these stocks falling The same logic applies to asset management and tax services. A guided filing platform makes its revenue by guiding users through a process. An AI that reads your documents, interprets tax law, and files taxes on your behalf eliminates the need for that guided workflow. The function continues to exist, but the revenue model built around it is under direct attack.

Navigating the AI ​​wave: What investors should pay attention to

This is where the conversation becomes crucial for investors. The benefits of AI – whether in terms of convenience, cost-efficiency or speed – are undeniable. Its adoption within enterprises will continue to accelerate. But the investment question is not simply “is AI good?” The more precise question is: who actually captures the financial value of AI, and within what time frame?

AI infrastructure requires extraordinary capital, advanced semiconductors, powerful servers, massive data centers and the energy to power them. The return on this investment, at the level of individual AI companies, remains uncertain and difficult to model. Meanwhile, legacy companies that once had strong fundamentals are being repriced almost overnight as the market reassesses their position.

What the graphs tell us

While the Nasdaq 500 Large Cap Index has delivered largely flat returns thus far, four sector ETFs have quietly but decisively outperformed: XLE (Energy) +20.2%, XLB (Material) 14.92%, This divergence tells an important story.

Capital is moving toward physical, hard-to-replicate assets, the very assets that AI cannot virtualize or replace. Energy and network infrastructure are not just adjacent to the AI ​​story; they are fundamental to it. Processing the volumes of data that modern AI requires requires extraordinary computing power, and that power requires energy on an unprecedented scale. Industrial raw materials and metals are similarly consumed by AI in building the data centers and server farms that make this possible. The market is already trading according to this logic.

Conclusion: respect the disruption, but choose what remains

AI is not a passing trend. It is a structural change in the way economies function, how companies create value and how capital is allocated. The pace of self-improvement and growing use cases have already shown that this technology will not wait for industries to adapt at their own pace.For investors, the lesson is not to fear AI, but to understand where in the AI ​​value chain sustainable returns are most likely to be found. Companies whose entire value proposition rests on being a middleman are faced with a real existential question. Meanwhile, the physical world on which AI depends for energy, infrastructure and industrial capacity remains irreplaceable.

(The article is credited to Jimeet Modi, Founder and CEO of SAMCO Group)