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31 Jul 2025

The AI Supercycle™ Report: AI infrastructure, funding vs. exits, and hardware growth

The AI Supercycle™ Report: AI infrastructure, funding vs. exits, and hardware growth

Key Takeaways:

  • AI Infrastructure Accelerates: Pennsylvania is rapidly becoming the Silicon Valley of data centers, fueled by over $60 billion in AI investments from Google, Intel, and Amazon—driven by favorable energy economics and political momentum.
  • Funding vs. Exits Diverge: Despite raising $104.3 billion in Q1 2025, most AI startups are exiting via small-scale acquisitions. Liquidity lags even as capital pours into foundational models and enterprise tools.
  • Hardware Matters: From Arm Holdings’ 14x data center customer growth to SK Hynix’s record profits on memory chip sales, infrastructure providers are emerging as some of the biggest winners of the AI boom.

Quote of the Week:

“AI is for sure going to change a lot of jobs, totally take some jobs away, and create a bunch of new ones. This is what happens with technology, and in fact, if you look at the history of the world of technology-driven job change, it’s been happening for a long time. And the thing that is different this time is just the rate of which it looks like it will happen.”

— Sam Altman, CEO of OpenAI

Top 5: AI in the Headlines

AI is moving fast—so are the investment opportunities. The AI Supercycle™ Report highlights the key recent developments that AI investors interested in capturing the entire supply chain need to know. The report also includes examples of companies well-positioned to capitalize on these trends, as well as the Chart of the Week.

1. IBD: The U.S. Aims To Be An AI Data Center Powerhouse

  • Why It Matters: Pennsylvania is emerging as a key AI hub due to significant investments from Big Tech companies like Intel ($28 billion), Amazon ($7.8 billion), and Google ($25 billion), spurred by President Trump’s policies and the state’s energy advantages. This influx is transforming the state into a data center powerhouse, driving job creation and positioning it as a critical player in the AI infrastructure landscape.
  • Key Quote: “AI data center investment in natural-gas-rich Pennsylvania comes as analysts and the AI sector have started to see natural gas as the best fuel to bridge the gap to potential nuclear power plants or to electrical-grid tie-ins.”

2. CNBC: AI Startups Raised $104 Billion in First Half of Year, but Exits Tell a Different Story

  • Why It Matters: AI startups raised $104.3 billion in the U.S. in the first half of 2025, nearly matching the total for all of 2024, driven by massive rounds of capital for companies like OpenAI and Anthropic. Most exits have been smaller bolt-on acquisitions rather than high-value IPOs. The funding surge, which accounted for nearly two-thirds of U.S. venture capital, contrasts with a sluggish exit market, highlighting a disconnect between investment and liquidity.
  • Key Quote: “The dominant exit trend right now is frequent but lower-value acquisitions and fewer IPOs with significantly higher value.”

3. CNBC: Google to Invest $25 Billion in Data Centers and AI Infrastructure Across Largest U.S. Electric Grid

  • Why It Matters: Alphabet’s Google is accelerating its AI push by investing heavily in regional data centers. The investment reflects growing enterprise demand and intensifies the race to control AI infrastructure capacity.
  • Key Quote: “Google will also spend $3 billion to modernize two hydropower plants in Pennsylvania to help meet the growing power demand from data centers and AI in the region.”
  • Stock Exposure: AIS includes Advanced Micro Devices (AMD) and Micron Technology (MU)—key suppliers of AI chips and memory used in hyperscale data centers like those google is expanding.

4. Reuters: Arm Sees 14x Growth in Data Center Customer Base Since 2021

  • Why It Matters: Arm Holdings (ARM) has reported a 14-fold increase in its data center customers since 2021, growing to 70,000, with a significant portion of this growth attributed to the surge in demand for generative AI computing under CEO Rene Haas’s leadership. The company is also expanding into the PC market and benefiting from a 12-fold spike in startups using its chips.
  • Key Quote: “Arm has benefitted from the frenzy around generative artificial intelligence computing and said a significant portion of its data center growth is due to AI.”
  • Stock Exposure: AIS holds ARM, which is positioned to gain share in the expanding market for AI-optimized processors.

5. CNBC: SK Hynix Posts Record Earnings on AI Boom

  • Why It Matters: SK Hynix, a top supplier of high-bandwidth memory (HBM) used in AI chips, posted record profits as demand for AI infrastructure surges. Memory is a critical and often overlooked component of AI scalability.
  • Key Quote: “SK Hynix has established itself as the global leader in HBM, supplying clients such as U.S. AI darling Nvidia.”
  • Stock Exposure: AIS includes SK Hynix (000660 KS) and Western Digital (WDC)—leaders in memory and storage vital to AI model training and inference workloads.

Chart of the Week: Data Center Energy Consumption

Closing Insights

AI infrastructure is no longer just a behind-the-scenes enabler—it’s the front line of global investment strategy. From record capital raises to multi-billion-dollar data center buildouts, the scale and urgency of AI deployment are accelerating. Yet this momentum is not evenly distributed. While private markets chase growth, public markets are rewarding the companies supplying the backbone: chips, memory, cooling, and compute.

As firms like Google, Arm, and SK Hynix double down on infrastructure, investors are increasingly focused on scalability, efficiency, and power dynamics—both technological and geopolitical. At VistaShares, we believe the AI Supercycle™ is being built from the bottom up, and that long-term exposure to the full AI supply chain—from semiconductors to servers to storage—is essential.

The VistaShares Artificial Intelligence Supercycle ETF™ (AIS) offers Pure Exposure™ to the ecosystem powering the AI revolution. Whether it’s memory capacity, power optimization, or hyperscale deployment, AIS is designed to capture the infrastructure layer that’s enabling AI to scale from labs to everyday life.

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (844) 875-2288. Read the prospectus or summary prospectus carefully before investing.

Investing involves risk, including possible loss of principal

For the VistaShares Artificial Intelligence Supercycle ETF (AIS) top holdings & fund details, please visit: https://www.vistashares.com/etf/ais/#holding

Artificial Intelligence Risk. Issuers engaged in artificial intelligence typically have high research and capital expenditures and, as a result, their profitability can vary widely, if they are profitable at all. The space in which they are engaged is highly competitive and issuers’ products and services may become obsolete very quickly. These companies are heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights.

Equity Market Risk. Common stocks are generally exposed to greater risk than other types of securities, such as preferred stock and debt obligations, because common stockholders generally have inferior rights to receive payment from specific issuers.

Technology Sector Risks. The Fund will invest substantially in companies in the technology sector, and therefore the performance of the Fund could be negatively impacted by events affecting this sector. Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a significant effect on the value of the Fund’s investments.

Foreign Securities Risk. Investments in securities or other instruments of non-U.S. issuers involve certain risks not involved in domestic investments and may experience more rapid and extreme changes in value than investments in securities of U.S. companies.

Index Strategy Risk. The Fund’s strategy is linked to an Index maintained by the Index Provider that exercises complete control over the Index.

New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have an extensive track record or history on which to base their investment decisions.

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