AI Margin Compression

Markets are pricing a story the data is only now starting to confirm. GPU capex commitments by the hyperscalers crossed three hundred billion in the trailing twelve months. Software companies — the buyers of that capacity — are showing the first ARR-to-cost spread compression in a decade. The Current is no longer emerging; it is what the smart capital is already repositioning around.\n\nThe believer side is dense. Equity strategists at Goldman, JPMorgan, and Morgan Stanley have all published margin-compression theses in 2026. NVIDIA's gross margin guidance softened in the Q1 print. The CFO survey from Brainyard shows 58% of software CFOs flagging AI infrastructure costs as a top-three margin concern.\n\nThe skeptic side is narrower than it used to be. The principal counter-argument — that inference costs collapse faster than capex amortization — is structurally true but operationally lagged. Three years of GPU depreciation will compress margins before the inference-curve catches up. The Current accelerates through that gap.