Post by Alvarez & Marsal

The AI infrastructure race has become global, with new challengers, and the rules are changing fast. A&M's Rise of the Neoscalers report breaks down who's winning, who's at risk, and why this upcoming cycle will separate the leaders from the rest. Four things to know right now: ▪️It's a supply war, not a demand debate: The Big Five hyperscalers have guided to US$750B+ in CapEx for 2026. Grid queues exceed five years in parts of the US. The window to build is narrow. ▪️However, use case durability still matters – neoscalers that can serve durable demand without risk of disintermediation are at an advantage. ▪️GPU obsolescence is a base-case, not a tail risk: Residuals fall ~75% within three years of launch. A new accelerator architecture lands every two years. Every capital structure must price this in from day one. ▪️Contract quality is the dominant pricing variable. Investment-grade, take-or-pay, 10-year+ offtakes unlock project-finance gearing at core-infrastructure rates - bank or insurance-led. Short-tenor exposure stays in higher-spread private credit. The bifurcation is structural and compounding. Read the full report: https://okt.to/yTWk7F John Sanger, Kaushik Sriram, Asya Walters, Jonathan Steinberg, Wei Xin, Eric Li #Neoscalers #AIInfrastructure #DataCenter #AMon