Gavin Baker of Altreides Management said the AI bottleneck trade — the bet on companies building the physical infrastructure for artificial intelligence — is winding down. As constraints on chips, data centers, and energy ease, investment is shifting toward scalable AI deployment and so-called neocloud operators. That rotation, Baker argued, has direct implications for how crypto strategies are being positioned.
Why the AI trade is changing
For the past couple of years, the crypto market has often traded in sympathy with AI infrastructure stocks and tokens. The logic was simple: whoever builds the pipes wins. But Baker, speaking in a note this week, said those pipes are getting built faster than expected. The scarcity premium that made infrastructure plays so attractive is eroding.
“The AI bottleneck trade is winding down,” Baker stated, according to the Altreides commentary. That’s a shift that could ripple into crypto portfolios that loaded up on GPU-backed tokens, decentralized compute networks, and other plays tied to hardware scarcity.
Neocloud operators enter the frame
Baker’s focus is now on neocloud operators — a new breed of cloud providers designed from the ground up for AI workloads rather than general-purpose computing. These firms don’t just rent servers; they optimize for model training and inference at scale. As more capital flows into scalable AI deployment, the infrastructure layer becomes commoditized, and the value moves up the stack.
For crypto, that could mean a rebalancing. Tokens or projects that rely on renting out idle GPU capacity may face margin compression. Meanwhile, platforms that help deploy AI models on-chain or integrate AI agents into DeFi protocols could see renewed interest.
Crypto strategies in the crosshairs
The shift isn’t just about token selection. Baker’s observation points to a broader rethinking of how crypto portfolios interact with AI narratives. If the easy money in infrastructure is gone, the next wave of returns may come from applications that actually use AI — not just those that supply it.
That doesn’t mean a selloff in AI-related crypto assets. But it does suggest that investors who rode the infrastructure wave should be asking whether their thesis still holds. Baker’s note doesn’t name specific projects, and neither do we. The signal is directional: move from picks-and-shovels to the miners who work the seam.
What comes next
Altreides Management hasn’t laid out a public timeline for rebalancing its own portfolio, and Baker’s statement is a macro call, not a trading signal. But the message is landing as crypto fund managers review midyear allocations. The question now is which neocloud operators — and which crypto projects that serve them — will capture the next leg of capital.
