As supply-chain bottlenecks collide with surging AI demand, markets brace for volatility and winner-takes-all dynamics
AI is entering a new phase—not just a boom, but a bottleneck. According to Nigel Green, CEO of deVere Group, AI hardware shortages will become one of the most important drivers of global markets in 2026, reshaping pricing power, sector performance, and investor strategy.
Green warns that the world’s rapid AI infrastructure expansion is now colliding with “physical limits in global supply chains,” creating a squeeze in critical components—from advanced chips to high-bandwidth memory and power systems. “This imbalance,” he says, “is already pushing up prices, concentrating market gains, and raising the risk of volatility.”
From Growth Story to Scarcity Story
The global race to build data centres and accelerate AI computing has triggered unprecedented demand for specialised silicon and networking hardware. Manufacturers are prioritizing hyperscalers and deep-pocketed AI customers, pushing prices sharply upward.
“This is where the AI story turns hard-edged,” Green explains. “It becomes about bottlenecks, allocation, and who controls supply.”
“AI demand is real and durable — but scarcity will now drive the market narrative.”
— Nigel Green, CEO, deVere Group
This scarcity is rewriting market behaviour. Major cloud providers and enterprises are now locking in multi-year supply deals to secure capacity, creating clear winners—those with guaranteed access to key components—and losers, who face rising input costs and shrinking margins.
Market Concentration and Hidden Fragility
Stock market gains are increasingly concentrated among a small set of hardware and infrastructure suppliers with access to constrained components. This masks broader weaknesses across the tech sector.
“Markets look stronger on the surface,” says Green, “but underneath they’re becoming increasingly fragile.”
Outside AI infrastructure, ripple effects are already visible. Consumer electronics companies—smartphones, laptops, and device makers—draw from the same component pool that is now being diverted to AI. As supply tightens, price increases for consumers appear inevitable.
A New Kind of Inflation—and a New Kind of Risk
The distortion extends to macro signals. Headline inflation may appear controlled, yet tech-sector pricing pressure is intensifying. Manufacturers face higher production costs, while consumers face slower upgrade cycles.
“In 2026, this divergence becomes more pronounced,” Green predicts. AI-driven demand will continue rising, while supply constraints persist, creating earnings risks even in a seemingly supportive macro environment.
Not All Tech Will Benefit
The old assumption that all tech benefits from innovation cycles no longer applies. Scarcity is selecting winners and losers with unprecedented speed.
“AI is not lifting all boats,” Green says. “It is selecting winners and losers.”
Capital expenditure trends reinforce this: global investments in AI infrastructure are locked in for years, favouring suppliers with early access to constrained components. But this also increases vulnerability—any miscalculation in demand or shifts in technology could rapidly destabilise valuations.
Volatility Becomes the New Normal
As 2026 approaches, markets should expect sharper swings driven by earnings surprises tied to supply delays, contract structures, and inventory visibility. “The days of vague AI exposure are over,” Green emphasizes. “Precision matters.”
Final Outlook
Green concludes with a clear warning: “AI demand is real and durable, but scarcity—among other factors such as performance over hype—will now be driving the market narrative. Investors ignoring that shift do so at their own risk.”