Market Update: Three Major Developments in AI

Thus far we have been tracking three dominant themes in the Artificial Intelligence (AI) revolution. They are:

1. The deflationary impact of AI replacing white collar jobs.
2. AI energy/ commodity demand igniting a boom in hard assets.
3. The impact of AI on healthcare in terms of diagnostics and drug development.

We’ve had major developments in all three areas in the last week.

Regarding #1, Microsoft (MSFT), which is a dominant leader in AI via its partnership with OpenAI announced it has saved $500 million in costs courtesy of AI while simultaneously laying off another 9,000 employees. This is MSFT’s third round of layoffs bringing the total number to ~15,000 for the year. The company is not explicitly stating that AI is responsible for this, but connecting the dots it’s obvious.

This is yet more evidence that AI, while a boon for corporate profits (MSFT ended 2Q25 with $70 billion in revenue and $26 billion in profit), is HIGHLY deflationary from an economic perspective, resulting in higher unemployment and lower incomes. With wealth concentration increasingly becoming unpalatable from a political perspective (see the public’s reaction to Jeff Bezos’ ornate wedding in Venice) AI could very well end up being a trigger for political upheaval.

Which brings us to #2: AI’s effect on hard assets.

We’ve previously noted that the AI build out is resulting in greater demand for commodities/ hard assets. By quick way of review, consider that depending on its size, a single AI-related data center can require:

1. One to five tons of lithium.
2. 30-100 tons of copper.
3. Up to 1 ton of silicon.
4. 10,000-50,000 tons of concrete.
5. 1,000 to 5,000 tons of steel.

This is increase in demand is beginning to appear in the markets. We’ve previously noted major breakouts in a number of commodities/ hard assets including copper, steel, uranium and more.

You can now add silver to the list. The precious metal is critical for Silver is essential for semiconductors, sensors, connectors, and high-power components like silver-palladium multi-layer ceramic capacitors (MLCCs) used in AI servers and chips. The AI chip market is expected to grow by over 30% annually over the next nine years. And silver has finally woken up to the fact that this will mean MUCH more demand.

The precious metal recently broke out to new highs. Silver is breaking out of a massive ~15-year Cup and Handle pattern. The upside target for this move is north of $60 per ounce!

Silver is not the only hard asset breaking out. Copper is at all-time highs. Steel stocks are breaking out. Uranium continues to rally and so on.

Which brings us to our final theme: the impact of AI on healthcare.

Previously we’ve noted the following:

1. Big pharma (Novo Nordisk, IQVIA, etc.) is partnering with Nvidia (NVDA) to use AI in drug discovery, development and manufacturing.
2. Machine learning using AI is proving to be even more accurate that physicians at diagnosing complicated medical conditions.

Last week, Alphabet (GOOGL) released a new open-source Large Language Model AI platform, MedGemma 27B, that is capable of not only reading medical texts but can accurately read medical images with a nearly ~90% accuracy. What’s most impressive is that this new model costs only 10% of larger more robust models, despite being almost as accurate. As an open-source model, GOOGL is allowing healthcare providers (hospitals, researchers, etc.) to download the model and even tweak it to suit their specific needs.

Add if all up, and it is clear the AI revolution is nowhere near over. Every other week a new development is announced that has major implications for the three themes we are tracking. And perhaps the most exciting aspect of this is the fact that it means there is still MASSIVE potential for investors to profit from the AI revolution.

So, if you missed out on the first wave of the AI revolution (the introduction of LLMs) don’t worry, there’s still PLENTY of opportunities to leverage the impact of AI towards profitable investing.

On that note, we just published a new special investment report The AI Plays Your Broker Doesn’t Know About detailing three unique investments designed to profit from the next phase of the AI revolution. Best of all, Wall Street has little to no idea these companies even exist, let alone their potential.

We are making just 99 copies available to the general public. To pick up yours...

CLICK HERE NOW!!!

Best Regards

Graham Summers, MBA

Chief Market Strategist

Phoenix Capital Research