Infrastructure providers benefit from the AI build-out regardless of which AI applications, models, or agents win. TSMC fabricates chips for NVIDIA, AMD, Google, and Amazon. ASML's EUV machines are required by every advanced fab. Broadcom's networking chips connect every AI cluster. These companies have structural demand driven by physics, not hype.
The Functional Index provides the long-side universe. The 6 layers ensure diversification across the supply chain rather than concentration in Compute (Layer 4) alone.
The short side targets companies scored as Terminal by the ABR Framework. These are companies whose core value proposition — the thing customers pay for — is something an autonomous agent replicates at near-zero marginal cost. The SaaSpocalypse thesis provides the structural argument.
Cannibalize or Die companies (Microsoft, Salesforce, Adobe) are the hardest to position on. They have the resources and distribution to pivot, but pivoting means cannibalizing their own revenue. The outcome is binary and execution-dependent. The AI Barbell deliberately avoids these uncertain positions in favor of higher-conviction long and short legs.
The AI Barbell is implemented across the AI Build-Out portfolio (long side) and selectively in the Derivatives portfolio (short side via puts). The strategy is regime-sensitive: in Green regime, both legs run full-size. In Red regime, the short side stays active while the long side is hedged.
Model Portfolios →ABR Framework →SaaSpocalypse Thesis →
