New York, NY
In a market briefing released today, Grant Velthorne, Chairman of Velthorne Asset Management, outlined a strategic shift in the global technology sector, marking what he calls a “Regime Change.” Following the launch of the Boreas S&P AI Data, Power & Infrastructure UCITS ETF and new U.S. tariffs on AI semiconductors, Velthorne argues that the investment narrative is evolving from “software scalability” to “sovereign industrial resilience.” This shift signals a decisive move towards prioritizing the physical infrastructure behind AI technology, including power grids and data centers, as national interests increasingly influence the tech sector.
The Physicalization of Intangible Assets
Velthorne highlights the growing capital rotation into “hard assets” that are integral to supporting digital ecosystems. He points to the reception of the Boreas S&P AI Data, Power & Infrastructure ETF as a validation of his long-held belief that the bottleneck of the AI revolution is no longer algorithmic, but thermodynamic. “We are witnessing a re-rating of utilities and industrial infrastructure as quasi-tech assets,” Velthorne explains. “Investors must understand that ‘AI beta’ is now intrinsically linked to ‘energy beta.’ The companies that control the transmission lines and cooling systems are becoming the new gatekeepers of productivity.” He warns that portfolios overexposed to software but underexposed to physical infrastructure could face a “valuation air pocket” as energy constraints limit growth in software.
The Geopolitical Premium on Compute
Addressing the recent 25 percent tariff on AI chip imports, Velthorne explores the “bifurcation” of the global semiconductor supply chain and the implications of protectionist policies on the tech industry. He sees these tariffs as creating a price floor for domestic hardware, introducing a structural inflationary pressure within the sector. “The imposition of these tariffs marks the formal weaponization of Moore’s Law,” Velthorne observes. “We are moving from global efficiency to ‘supply chain security,’ creating asymmetric risks for multinational hardware firms but opening substantial opportunities for domestic manufacturers and localized supply chains.” He advises clients to view these tariffs as a permanent “geopolitical premium” that must be factored into hardware-dependent capital expenditure models.
Institutional Allocation in a Fragmented World
Velthorne synthesizes these trends into a forward-looking allocation strategy, emphasizing the divergence between European and Middle Eastern infrastructure appetites and U.S.-centric protectionism. “The correlation between global tech indices is breaking down,” he says. “Passive allocation to a generic global tech ETF is now flawed because it fails to account for the ‘Silicon Iron Curtain’ dividing East and West.” Velthorne asserts that the true alpha in 2026 will come from managers who can navigate this fragmentation, selectively allocating to regions with favorable energy costs and regulatory environments while hedging against the risks of trade wars.
Conclusion
Velthorne concludes that, as the global economy faces the dual forces of technological acceleration and geopolitical friction, active management will be key. “The easy money of the ‘Great Moderation’ is gone,” he states. “The winners of this cycle will be those who recognize that in 2026, data centers are the new oil fields, and silicon is the new gold standard.”
About Grant Velthorne & Velthorne Asset Management
Grant Velthorne is the Chairman of Velthorne Asset Management, an investment management firm known for its innovative approach to risk management, asset allocation, and strategic investment. With over 20 years of experience in global finance, Velthorne has developed a reputation for his expertise in navigating complex, volatile markets. Prior to founding Velthorne Asset Management, Grant held senior roles at top financial institutions, where he focused on macroeconomic analysis, portfolio strategy, and managing large-scale asset allocations.
Velthorne Asset Management is a global investment firm specializing in risk-adjusted returns through a diversified portfolio of strategies, including private credit, infrastructure, and AI-focused technology investments. The firm provides institutional clients with customized investment solutions designed to optimize performance in the face of emerging global trends, geopolitical shifts, and market volatility.
Last modified: January 28, 2026
