The dispersion among the early AI winners is here to stay, says JPMorgan's Gabriela Santos

AI Investment and Growth - AI is considered a transformational technology, with the focus shifting to how over-extrapolated it already is and staying ahead of the next waves of investment [2] - The Magnificent 7 earnings showed over 20% earnings growth, with cloud revenue growing 25% year-over-year [3] - Dispersion within the early winners of the AI story is expected to continue [4] Infrastructure and Power Constraints - The physical infrastructure needed for AI, particularly electricity power, is a key concern [4] - China's less constrained approach to energy and a more modern grid system give it a potential advantage in AI adoption [4] - Investment interest is growing in solutions for upgrading the grid, especially in private markets and infrastructure funds, including contracted power companies [4][12] Energy and Policy Considerations - China is taking an "all of the above" approach to energy, including coal, nuclear, renewables (especially solar and batteries), and fossil fuels [7][8] - Natural gas has an important role to play in the US before full renewable solutions are reliable and stable [9] - Upgrading the US power grid, which has not been significantly upgraded in decades, is crucial [4][9] Investment Strategy - The focus should be on structural stories like AI in the US and certain Asia markets, rather than betting on a cyclical economic recovery [11] - Active focus is needed in tech and growth funds due to more dispersion in large companies [11] - Opportunities exist in private markets, specifically infrastructure funds with regulated and contracted power companies [12]