In a market briefing released today, Grant Velthorne, Chairman of Velthorne Asset Management, identifies a pivotal “Regime Change” in the global technology sector. Following the launch of the infrastructure-focused Boreas S&P AI Data, Power & Infrastructure UCITS ETF and the imposition of new U.S. tariffs on AI semiconductors, Velthorne argues that the investment narrative has shifted decisively from “software scalability” to “sovereign industrial resilience.”
Velthorne points to the end of the borderless digital economy. “The launch of specialized vehicles like the Boreas suite on Deutsche Börse Xetra is more than a product expansion; it signals that institutional capital is now prioritizing the tangible backbone of AI power grids and data centers over the intangible code layers,” he explains. “With protectionist measures from Washington, we are entering an era of ‘AI Nationalism,’ where access to compute and energy will dictate sovereign yield curves.”
The Physicalization of Intangible Assets
Velthorne highlights the capital rotation into “hard assets” that support digital ecosystems. He notes that the reception of the Boreas S&P AI Data, Power & Infrastructure ETF validates his long-held thesis that the bottleneck of the AI revolution is no longer algorithmic, but thermodynamic.
“We are seeing a re-rating of utilities and industrial infrastructure as quasi-tech assets,” Velthorne states. “Investors must understand that ‘AI beta’ is now intrinsically linked to ‘energy beta.’ The companies that control the transmission lines and cooling systems are the new gatekeepers of productivity.” He warns that portfolios heavily invested in pure-play software but underexposed to physical infrastructure are at risk of a “valuation air pocket” as energy constraints begin to limit software growth rates.
The Geopolitical Premium on Compute
Addressing the recent 25% tariff on specific AI chip imports, Velthorne discusses the “bifurcation” of the global semiconductor supply chain. He argues that this policy creates a price floor for domestic hardware, triggering a structural inflationary impulse in the tech sector.
“The imposition of these tariffs marks the formal weaponization of Moore’s Law,” Velthorne observes. “We are moving from global efficiency to ‘supply chain security,’ creating asymmetric risks for multinational hardware firms, but substantial opportunities for domestic fabricators and localized supply chains.” He advises clients to view these tariffs not as temporary trade disputes, but as a permanent “geopolitical premium” that must be factored into all hardware-dependent capital expenditure models.
Institutional Allocation in a Fragmented World
Velthorne synthesizes these trends into a forward-looking allocation strategy. He points to the divergence between the “Boreas” thematic approach which captures the European and Middle Eastern appetite for diversified infrastructure and the U.S.-centric protectionism as evidence of a fragmented global market.
“The correlation between global tech indices is breaking down,” he asserts. “Passive allocation to a generic global tech ETF is now flawed because it fails to account for the ‘Silicon Iron Curtain’ dividing East and West.” Velthorne concludes that the true alpha in 2026 will be generated by managers who can navigate this fragmentation, selectively allocating to regions where energy is cheap and regulation is favorable, while hedging against the friction costs of trade wars.
Conclusion
As the global economy grapples with the forces of technological acceleration and geopolitical friction, Velthorne emphasizes the need for active management. “The easy money of the ‘Great Moderation’ is gone,” he summarizes. “The winners of this cycle will be those who recognize that in 2026, data centers are the new oil fields, and silicon is the new gold standard.”
Last modified: January 19, 2026
