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Dan Ives: AI Infrastructure Cycle Only in Third Inning

Yorkville Ives senior managing partner Dan Ives said the AI investment cycle remains at an early stage, calling it “the third inning of a nine-inning game” in a research note. Ives said the current phase is supply-constrained rather than demand-driven, and expects third-quarter backlog and remaining performance obligations to grow faster than revenue, with services demand far exceeding hyperscaler supply capacity.

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AI take

Ives' framing matters less for its baseball metaphor than for the bottleneck he identifies: supply, not demand. If backlog and remaining performance obligations outpace revenue, the constraint sits in capacity buildout rather than buyer appetite, which shifts the near-term question from whether AI capex continues to whether it can be physically delivered. Services demand running ahead of hyperscaler supply also implies pricing power sits with whoever can provision compute, a dynamic worth tracking as the cycle matures.

Generated by AI for reference only.

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