Hedge Fund Manager Baker: AI Bottleneck Trade Fades, SpaceX Poised for AI Power Dominance

Hedge fund manager Gavin Baker of Atreides Management warns the "AI bottleneck trade," which drove gains for AI infrastructure suppliers, is fading. Baker argues the market is shifting focus from immediate supply constraints to identifying companies with durable franchise value beyond these bottlenecks, highlighting SpaceX's potential in AI power infrastructure. Baker cited Ajinomoto's recent refusal to raise prices for a core chip insulation product, despite its stock surge, as evidence the bottleneck trade is nearing its end. He points to SpaceX, an early investment, for its ability to convert gigawatt-level power into profit. SpaceX plans solar-powered orbital AI data centers, aiming for 1GW capacity by late 2027, and has pre-ordered 20% of NVIDIA's (NVDA) Rubin chips. Baker also noted overlooked aspects of a potential SpaceX IPO, including significant employee stock ownership, suggesting prior liquidity opportunities for those wishing to sell.