The Grand Confluence
One of our foundational worldviews is The Grand Inflection Point. We had put this on paper (or screen) about 2 years ago. In it, we pointed out the strange phenomenon facing the data economy – while data grows at an exponential rate, software is catching up, but hardware is facing an impending stagnation. The demand of significantly faster processing and more memory is only going to increase.
The Inflection Point is this: semiconductor manufacturers and hardware engineers have never needed to innovate as much as they need to now; Our bet is that they will, and that will lead to a massive exponential growth in the data economy. The Grand Inflection Point started us on a path of investing in some of the best semiconductor designers and fabricators. Over the last 2 years, the bet has paid off extremely well.
Now that I think back, I could rename that piece The Grand Confluence. That’s because, it seems to me that stalwarts like Nvidia, Xilinx and ASML are innovating fast enough to allow for hardware that can handle the explosive amount of data. And it’s not just handling data – it’s about processing it. Ultimately, data is useless if we can squeeze out actionable insights. The data is there, the software is improving, and there is now hope that hardware will catch up.
One the manifestations of this the Fourth Industrial Revolution.