Back Research Notes Why AI’s ‘Astronomical and Insatiable Demand’ Matters More Than Geopolitics Right Now Published on June 15, 2025 By Jordi Visser In this week’s video ( watch here ), I break down why, despite rising geopolitical tensions between Israel and Iran, markets showed remarkable resilience on Friday. History suggests that trading geopolitical events after conflicts begin is usually a losing game. The S&P barely moved, and both the dollar and bond yields remained largely unresponsive—clear signs that the safe haven status of the U.S. is shifting in investors’ minds. While concerns about tariff-driven inflation remain, recent data hasn’t shown any material impact yet. The economic landscape is becoming increasingly nuanced. The top half of earners are benefiting from asset appreciation and AI-driven productivity, while the bottom half face job insecurity, stagnant wages, and rising living costs. This divergence complicates how inflation is interpreted. The labor market isn’t in a recession, but job openings are falling and wage pressures are easing. As inflation moderates and the job market softens, pressure is mounting on the Fed to begin cutting rates. Still, the broader macro conversation is shifting—toward fiscal dominance, wealth inequality, and structural labor dislocations that are reshaping investor expectations. But the most important story this week is the explosive demand for AI infrastructure. Oracle’s earnings revealed a stunning surge in enterprise AI adoption, with one customer requesting all available capacity across the globe—prompting a $25 billion investment in new data centers. This is part of a broader global race for compute power: semiconductors are rallying, DRAM prices are spiking, and analog and auto chips are even showing signs of demand as the AI boom expands into embodiment. Google announced AI token usage has grown 50× year-over-year, signaling electricity demands that could rival national grids. At the same time, the digital economy for financial transactions is booming. Stablecoins have crossed $33 trillion in annualized transaction volume, with companies like Amazon and Walmart exploring their own corporate coins. As bipartisan support grows for legislation like the GENIUS Act, AI and stablecoins are ushering in a new economic architecture—one built on compute, power, and decentralized value rails. Timestamps: (00:00–00:37) Focus shifts from U.S.–China tensions (now “in mediation”) to AI and stablecoins as the key macro drivers. (00:55–01:43) Equity markets dipped slightly on Israel–Iran escalation; technical pullback suggests consolidation before new highs. (02:08–02:49) Despite bearish sentiment, the U.S. dollar and bond yields remain stable even amid conflict. (03:35–05:01) AI momentum dominates; historical conflicts involving Israel typically cause only brief market disruptions. (06:19–07:16) U.S.–China truce includes a rare earths deal; China injects $1.5 trillion to stabilize property market. (08:06–12:29) Inflation is cooling: weaker super-core data, falling airfare prices, soft PMI, and labor market easing. (16:22–18:45) Oracle earnings reveal “astronomical” AI demand—$25B in new data center investments. (23:44–29:04) Semiconductor cycle revives; Google LLM token usage up 50× YoY—huge demand for compute and power. (48:36–55:04) Stablecoins surge: $33T in transaction volume; Amazon and Walmart explore corporate coins. (55:22–56:32) Stablecoin regulation advances: GENIUS Act progresses, with corporate stablecoins gaining traction in the U.S. and Europe. 👉 Watch the full video here