The Risk at the End of the Whip | GMO’s Tom Hancock on Finding Conviction Amid the AI Hype
About this episode
Tom Hancock from GMO discusses AI as an investment opportunity and the importance of quality in today's market.
This episode of Excess Returns features GMO’s Tom Hancock on how to think about AI as an investment opportunity and what truly defines “quality” in today’s market. The conversation breaks down the AI value chain, challenges common assumptions about where value will accrue, and ties it all back to building durable portfolios in a rapidly changing technological landscape. Tom walks through his “Hype vs High Conviction” framework, explaining why identifying the right layer of the AI ecosystem may matter more than simply betting on the theme itself, and why balance sheets, durability, and capital allocation remain critical even in the most exciting growth environments. Hype vs High Conviction https://www.gmo.com/americas/research-library/hype-vs-high-conviction_insights/ Topics Covered: Why AI may be the most important investment decision today The four-layer AI stack: applications, LLMs, hyperscalers, and infrastructure Why investors confuse secular trends with investable opportunities Following the money through the AI value chain The hidden risks of investing lower in the stack Why today’s tech leaders differ from the dot-com era Growth vs maintenance capex and what it means for…
People in this episode
Host: Excess Returns
Guest: Tom Hancock
Topics covered
- AI investment opportunities
- AI value chain
- portfolio construction
- quality in investing
- technology trends
Mentioned in this episode
Organizations: GMO
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