Andreessen Horowitz General Partner David George released the second edition of "Market Status," stating that technology is the cycle of everything, and the share of AI infrastructure in GDP has just surpassed that of the railroad era.

The report and podcast feature over a hundred charts interpreted by George, Sarah Wang, Alex Immerman, and Santiago Rodriguez. High-tech equipment, software, and R&D account for about 55% of U.S. capital expenditures, while technology represents about 40% of U.S. stock market value, with eight of the top ten global companies being U.S. tech firms. As of late August, technology contributed approximately 76% to S&P 500 earnings growth. Alphabet, Amazon, Meta, Microsoft, and Oracle's capital expenditures are projected to be around $780 billion in 2026, up from $416 billion in 2025, with expectations to exceed $1 trillion annually starting in 2027. Model companies have raised over $350 billion cumulatively. Six private companies are valued at approximately $2.4 trillion based on their latest funding rounds, surpassing all public funding in the past decade. About 75% of listed software companies are profitable. The stock market has risen about 90% since ChatGPT, with earnings increasing about 15%, but multiples have not expanded in sync.

The demand-side diffusion is still early: the median AI supplier spending for the top 1% of companies is about eight times that of the top 10%; approximately 69% of S&P 500 companies have deployed AI, about 30% disclose quantifiable impacts, and only about 2% reach a level where "stopping would be immediately noticeable." The number of proxy users is still only in the millions, but it can cover billions of internet users; Meta and Google have monetized U.S. users at over $200 per year, believing there is more room for proxies. Themes for the next five years include consumer proxies, robotics, autonomous systems, AI and biology, personal health, enterprise diffusion, and a new wave of U.S. vitality. Global infrastructure demand is cited as approximately $90 trillion by 2040. Factories or data centers are being written as products themselves.

Funding is shifting from software subscriptions to chips, power, and construction. Buyers aim to convert free cash flow into semiconductor and power capacity in cloud factories, while sellers are enterprises still in shallow deployments of enterprise software. The event is driven by the annual market report. Beneficiaries are hardware and power companies positioned upstream in the capital expenditure chain; pressured are software stocks that have not integrated models into workflows and cannot report quantifiable impacts. Construction has been priced according to railroad standards, while penetration is still measured in single-digit work replacements.

Source: Public Information