Abstract The AI market is expected to reach an inflection point in 2025. The global AI market size reached $279-294Bn in 2024 and is projected to grow at a 29-36% CAGR through 2030-2032. Meanwhile, hyperscaler capital expenditure is expected to exceed $300Bn in 2025, up 25-42% from 2024. The infrastructure buildout continues to dramatically outpace application revenue, creating both opportunity and risk across the value chain. This post examines where value has accrued, emerging competitive dynamics, geopolitical pressures, and the strategic framework for AI's evolution toward Jensen Huang's vision of three distinct AI paradigms: Agentic AI, AI Factories, and Physical AI. 1. The AI Spending Spree: Can Application Revenue Catch Up The concerns around AI ROI have intensified in 2025, driven by unprecedented capital expenditure levels. Microsoft has pointed out that it could take up to 15 years for AI investments to generate positive returns, while combined hyperscaler CapEx inc...