00:00What does medium term look like to you at the moment? What timelines are you thinking about?
00:05So the next few years are actually more straightforward from the AI-themed perspective.
00:08So we really do believe that the next few years are very clear from an AI-themed perspective
00:13because of the amount of capital that you'll see being invested in that space.
00:17Now, longer term, of course, there are questions.
00:19Firstly, in terms of how long you can see the beneficiaries of that spend really continue to do well.
00:26And there's going to be questions in terms of, for those hyperscalers,
00:29will that CapEx spend look more like we saw, for example, in the telcos in the kind of late 90s,
00:35early 1000s,
00:35or will it be more like the cloud?
00:37They are the kind of big questions that the market will be grappling with.
00:40There'll be no doubt that at some point, I'd say two to three years from now,
00:44that those questions will start to be impacting.
00:45Why do you think it's that long?
00:47Because of the committed spend that we're seeing at the moment in the market.
00:51But the committed spend can change.
00:53Commitments are, like, there are commitments and there are commitments.
00:57And if the market turns around and goes,
00:59actually, we don't think that this is going to generate the ROI that you're telling us it is.
01:04And we don't think that the beneficiaries, that the people are ultimately going to use the AI
01:10are getting the benefits they need from it.
01:12Doesn't that timeline get shorter a lot quicker?
01:15Possibly.
01:15But the level of the numbers is so significant that there's quite a lot of headroom around it.
01:20But the market may value that as being a negative.
01:23You're spending too much money, folks.
01:26That's not a good thing.
01:27That's a bad thing.
01:28Yeah.
01:29I mean, it will be.
01:31Every CapEx cycle has the point that the CapEx overspend starts to happen.
01:35We don't believe that we're there now.
01:37So the $10 trillion that has been committed, or we see that it's been committed over to 2030,
01:41that is kind of 10% of the current global GDP.
01:43That's our forecasts of the commitment of the spend.
01:46There's quite a lot of headroom that that could come down just a little bit,
01:49and there would still be a huge amount of capital being invested in the system.
01:53The other thing is that historically, these hyperscalers,
01:55they had been being able to spend, of course, out of their free cash flow.
01:59That has changed.
02:00They are now having to raise debt.
02:01There is some nervousness around that.
02:03But from my perspective, that's entirely normal.
02:05When you have these big CapEx spends,
02:08there is always a point that they go from being free cash flow positive to negative.
02:12It's almost what wasn't normal is that period of time when they didn't need to raise capital,
02:17and they didn't need to be free cash flow negative to do that.
02:20So I think we're still relatively early in this kind of big, big change in terms of human spend.
02:26There is no doubt that this will come, but we think for the next two, three years is there.
02:31That means from an investment perspective, you lean into the AI theme.
02:35You do the kind of secondary beneficiaries of that.
02:38But you do, Guy, need to diversify those portfolios,
02:42A, because the risks are not kind of – there is a risk around it,
02:46and secondly because of the day-to-day of what we're seeing in the market.
02:49So that's where it comes in, healthcare, LATAM, even the U.K.
02:53Really interesting diversification trades.
02:55Thank you very much.
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