Nick Dennis | Fund Manager | Anchor Capital | mail me |
Two overarching themes are likely to dominate the investing landscape over 2026 and beyond – the unstoppable rise of Artificial Intelligence (AI) and the changing global order. These subjects are complex and dynamic. It is impossible (and unwise) to form a fully-fledged thesis. More important than knowing the terrain is having the right attitude to traverse it.
Here is my ironic take on AI. I am incredibly bullish on what it means for productivity and investment opportunities. However, I am tired of reading articles and posts that clearly show AI wrote them or heavily edited them. So I am writing this commentary without leaning on AI, even if it means there are a few typos.
AI momentum and market reactions
The impact of AI on businesses and the market is accelerating, with technology trends reshaping markets in real time.
Claude Cowork is an AI tool that makes it exponentially easier and faster for developers and non-developers to build software. Claude, an AI LLM/agent, wrote Cowork in only 10 days, compared to a normal development cycle of 3 to 12 months. The ‘Claude Code’ moment went viral on platforms like X, and the Bloomberg Odd Lots podcast captured the zeitgeist.
Much like the DeepSeek episode in early 2025, social media narrowed the collective consciousness with laser-like intensity. Software names have lagged the market for a while as investors weighed the risk of AI disruption.
The ‘Claude Code moment’ turned the steady bleed into a January rout. The baby has been thrown out with the bathwater. There will be long-term winners among the software wreckage, but the ground is treacherous. You could be right in 3 to 5 years, but still be down 50% in 3 months.
Tech investor Gavin Baker has an apropos quote for these situations:
Either you panic early, or you double up late – anything in between will get you killed!
From infrastructure to AI utilisation
2026 will be the year when we move beyond the AI infrastructure thesis, such as semiconductor names like Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC).
We will move into the AI utilisation thesis, as technology trends reshaping markets begin to show tangible commercial outcomes. Just a few days ago, two of our portfolio companies provided tangible evidence of what is to come. The founder of AI-powered insurance company Lemonade announced cheaper rates for drivers who use Tesla’s Full Self-Driving (FSD) functionality, as it is dramatically safer than humans.
Elon Musk posted about the move on X. This played a part in Lemonade’s share price rising over 23% in just two days. Lemonade is up 26% YTD (to 26 January).
Tesla is getting ever closer to fully autonomous driving. It is taking incremental steps with its Robotaxi project, with unsupervised rides in Austin, Texas. The future happens slowly, and then all at once.
Productivity, labour and the people question
Corporates, particularly those in the US, will find ways to use AI to boost productivity, as technology trends reshaping markets push firms to rethink operating models. This may come at the cost of employment, which will be disorienting at the macroeconomic level.
CEOs will be loath to mention AI, as job losses could make it a political flashpoint. I believe, for the foreseeable future, that having the right people will be the unlock or magnifier for AI.
If I have a workforce of 100 people and they use AI to ramp revenue-generating capacity from US$ 500 million to US$ 1million per person, then the best way to increase revenue is to hire more people.
The same logic applies to GPUs and compute in general. If they turn energy (watts) into revenue and energy is the biggest bottleneck, then the goal is to maximise revenue per watt, not minimise cost per watt. NVIDIA exemplifies this. Returning to people, the 80:20 principle applies. Having the right people with the right attitude is everything. More on this later.
Geopolitics and the new strategic landscape
A few thoughts on geopolitics. It is increasingly clear that the US does not accept the consensus view of a multipolar world. It is reasserting its position as the global hegemon within its “America-first” strategy.
The following article lays out Elbridge Colby’s thinking and the US’s strategic priorities: The Bridge at the Centre of the Pentagon. Colby’s core claim is that US strategy in the 21st century should prevent China from achieving hegemony over Asia. The rest of his framework follows from that point.
For deeper detail, you can read the US policy documents: the 2026 National Defence Strategy and the 2025 National Security Strategy.
Stress, media and investor psychology
Now to tie geopolitics, AI and attitudes together.
I sense that many people, perhaps a majority, operate at a stress level of 6 or 7 out of 10. They frequently spike to 9 out of 10, partly because of mainstream and social media. This can harm mental, physical and financial health.
Dispassion as an investing discipline
The first helpful attitude is dispassion – detachment, objectivity and impartiality. Whatever I think about US President Donald Trump is irrelevant to my mandate. What matters is what his actions mean for financial assets.
I can exploit the fact that others become emotionally charged and make poor financial decisions. The US strategic playbook is still unfolding, so more upheaval and triggering will come.
The same logic applies to individual shares. I buy Tesla because I think the share price will rise, not because I think Elon Musk is the kind of person I would like my daughter to marry.
Agency, optimism and long-term positioning
The next is not an attitude but an orientation: agency. I am often asked if I worry about AI’s impact in 10 years.
First, worrying about the worst case wastes time because you experience the misery twice. Second, the past, present and future belong to high-agency people. This is what I mean by the right people. People with a victim mindset see AI as an existential threat. People with a high-agency mindset see AI as an incredible opportunity. Both are right.
Finally, equity investors benefit from optimism, as most high-agency people are. Human and market history show that people innovate and always find a way.
A closing reflection on risk and meaning
I will end with this passage by C.S. Lewis.
He spoke about the atomic bomb, but his thinking applies to AI or any source of dread:
If we are all going to be destroyed by an atomic bomb, let that bomb when it comes find us doing sensible and human things – praying, working, teaching, reading, listening to music, bathing the children, playing tennis, chatting to our friends over a pint and a game of darts – not huddled together like frightened sheep and thinking about bombs. They may break our bodies (a microbe can do that), but they need not dominate our minds.
