Codie Sanchez breaks down six levels of AI investing, from energy and chips at the bottom to applications at the top. Energy and hardware underlie everything. Each level has different risk and opportunity, with practical examples at every tier.
Chapters
Everyone wants to know how to invest in AI. But the real question is where? Here's six levels to explain how it works and how you can get in the game on AI Investments. Level 1 Energy. The entire AI boom sits on power, infrastructure, utilities, renewables. You can't have AI without a ton of energy. So invest in utility companies, expanding data center capacity, or renewable projects selling power directly to AI. And for what it's worth, we're going to need a lot of it. Number two chips, graphic processing units or GPUs. Think of it like this. A central processing unit is the main brain of a computer. Like a single chef who cooks one dish at a time. A GPU is a kitchen with a a thousand chefs all cooking at once. AI needs the 1000 chef kitchen. And this is the hardware everyone is fighting for. And the people making it are companies like Nvidia and AMD. You could invest there. Level three data centers. Someone has to house these GPUs, the facilities and the cloud providers. This investment looks like backing operators building AI data centers, colocation facilities, computing hubs. Level four foundation models. These are the big brains and the names you know. Xai, OpenAI, Anthropic, Google, Meta. They build the models everyone else runs on. They're expensive to run, but they're public companies you can invest in. Level 5 software infrastructure. These are the tools that make AI usable. Vector databases, orchestration tools, model hosting platforms. This is like the plumbing for the entire AI economy. And level six applications and services. This is where we can make money when we don't understand AI very well. Build something that helps people in the background. This might be bookkeeping, recruiting, AI tools, apps. This could replace entire services. So when you think about investing or building AI, pick a level and watch as AI moves towards it and the values pile up.
