AI is eating the world. And increasingly, it’s eating portfolios, too. What began as a technology story funded by a handful of hyperscalers has evolved into a much broader capital markets story. As AI investment accelerates, public and private equities, credit, fixed income, infrastructure and real assets are all playing a role in financing the buildout.

In this episode of Can We Talk in Private?, co-hosts Alan Flannigan and Andrew Korz discuss their latest report, Hidden Layers: Rethinking Diversification in the Age of AI, and explore how AI is increasingly shaping investment portfolios across both public and private markets.

The conversation explores how investors can think differently about diversification in an era where a single technological theme is influencing outcomes across nearly every major asset class. The discussion introduces a practical framework for identifying AI exposure, contrasts the roles of public and private markets in funding the AI buildout and reinforces why understanding the economic drivers behind portfolio returns may be becoming just as important as traditional asset allocation.

• Funding the AI build-out has been  a story of mega-cap tech firms’ prodigious free cash flows. But now, it’s a capital markets story, as the next leg of the AI buildout pivots to rely on external funding.
• Investors may have more AI exposure than they realize as AI-linked assets occupy meaningful market share across equities, credit, infrastructure, and real estate in both public and private markets.
• Measuring AI exposure requires understanding where an investment sits within the AI value chain, not simply whether it is technology-related.
• New private market capital formation is becoming increasingly AI-focused, meaning future portfolio exposure may rise even without active allocation changes.
• Traditional diversification by asset class may provide less protection when multiple investments share the same underlying AI-driven economic exposure.
• Assets tied to differentiated economic drivers may become more valuable as investors seek diversification away from concentrated AI-related risks.

Alan Flannigan: AI is eating the world. Okay, maybe it’s not quite that dramatic. Hopefully, not today at least. But it’s a shorthand phrase we’ve used to reflect the all-consuming nature of the immense technological acceleration underway.

AI has no predetermined endpoint, and its continued advancement brings both legitimate concerns and the enormous promise of supercharging productivity, decision-making quality, and innovation This transformation is no ordinary software evolution. It’s also a massive industrial undertaking. The promise of this new economy requires it be built brick by brick, chip by chip. And build it we most certainly are. Trillions in CapEx today, with expectations of trillions more to come. That spending was once a story of the ironclad balance sheets and dominant incumbent business lines of the hyperscalers.

But now it’s a story of capital markets. Public and private equities, fixed income, credit, and real assets all aligning to support the theme. AI is eating not just the world, but it’s eating your portfolio too.

My colleague Andrew Korz has done the time-consuming work to quantify this impact for you. That’s the focus of today’s discussion, and we hope you enjoy.