THE BIG PICTURE

with the arrival of China’ s DeepSeek, an AI model that rivaled OpenAI’ s ChatGPT and Alphabet’ s Gemini, but was built for a fraction of the U. S. platforms’ cost.

The staggering economics of the data center infrastructure plans are difficult to reconcile. A single Meta Platforms data center in Louisiana is estimated to span the size of 1,700 football fields.

OpenAI, producer of AI leader ChatGPT, is projected to generate $ 30 billion or so in revenue in 2026, an impressive figure until one takes into account the $ 1.4 trillion in the company’ s future capex spending plans. And that’ s just one company.

Then there’ s the circular financing scheme that lies at the heart of the data center build-out— companies like Nvidia, Microsoft and others are making multi-billion-dollar investments in startups that then turn around and purchase Nvidia chips or Microsoft cloud services. Worries about those deals sparked major

selloffs in big tech businesses, alternative investment companies and business development companies( BDCs) last fall.

The concerns have even extended to financially strong tech giants that commanded lofty stock valuations partly because they were cash-rich, asset light and hugely profitable. But the asset-light attraction of these businesses is being eroded thanks to the massive infrastructure outlays. Some investors don’ t like it. Mighty Oracle, which has huge spending ambitions, was recently sued by its bondholders, according to Reuters. If bond investors are complaining, equity holders are likely to be equally aggrieved, especially after Oracle’ s shares dropped 44 % from a September 10 peak.

Outside the AI maelstrom, many strategists think both developed foreign nations like Europe and Japan and emerging markets represent better opportunities and these stock markets are likely to outperform America’ s.

In particular, new governments in Germany and Japan, two of the world’ s largest economies, could jump-start their regions after years of stagnation, Hooper thinks.

After years of outperformance, it’ s easy for most advisors’ clients to become complacent with the superior returns. But as DoubleLine’ s Gundlach told his investors, long-term trends can be your friend for longer than anyone expects, and he reminds them that U. S. equities trailed global markets from 1970 to 1990.

While the U. S. and China have been the lone leaders in the AI arms race so far, there is reason to believe that other nations will benefit from the early massive investments of the superpowers— and build their own AI infrastructure as efficiency increases and the costs come down.

“ Emerging markets are still cheap, and they have had a dismal performance for a long time,” says Rob Arnott, founder and chair of Research Affiliates.

16 | FINANCIAL ADVISOR MAGAZINE | JANUARY / FEBRUARY 2026 WWW. FA-MAG. COM