L&G Talks Asset Management · Sep 24, 2026 · 28m · 16m saved
With Ewan Bowerbank, Portfolio Manager in the Active Equities team at L&G · Matthew Rodger, Economist at L&G
Apple takes about 20% of smartphone volumes and about 80% of the industry's economic profit, and Ewan Bowerbank of L&G thinks AI could divide the same way between the frontier labs and open-source models.
Much of the market treats open source against the frontier labs as a contest one side has to lose. Bowerbank said both are growing at once, and that shortages of power, memory and electricians could make this investment cycle run longer than the market expects.
"So we kind of refer to it as having multiple Kodak moments at once."
Ewan Bowerbank, Portfolio Manager in L&G's Active Equities team, on L&G Talks Asset Management, speaks with management teams across the AI supply chain on a regular basis. He was joined by L&G economist Matthew Rodger in a conversation recorded on 21 September.
The full episode is covered here so you can skip it. 28 minutes of audio, 12 minutes of reading.
Here are the 13 insights that matter.
Key Takeaways
Chatbots are a small part of what AI can already do, so the cycle could run longer than the market expects
Open-weight models look cheaper per token, but Rodger said the saving often disappears per task
Apple takes about 80% of smartphone profit on about 20% of volume, the split Bowerbank sees as a possible model for AI
Chips and power do not depend on which AI model wins, which is why L&G has favored them
Bowerbank expects AI to disrupt many sectors at once, which he said favors picking stocks one by one
Data-center crews in Texas need housing, and the market missed modular lodging as an AI play
AI investment added about 1 percentage point to annual US growth in Q2, on Rodger's rough estimate
There are not enough electricians and plumbers, and Bowerbank called the slower build healthy
Rodger said markets are not expecting how fast regulation could come
1. What Investors Get Wrong
The host opened by asking each guest for one thing about AI that investors are getting wrong.
Governments will get more involved than people expect
Rodger said the list is long, but his pick is the role of the state as the systems get more capable.
"How much time do we have? I think it's a long list." — Matthew Rodger
He said the prospects for government and state involvement are greater than is commonly appreciated, "especially as these systems get ever more capable."
Chatbots are only the start
Bowerbank said AI is still broadly seen as a chatbot interface such as ChatGPT. Businesses and consumers are starting to use AI agents that carry out tasks through software tools, and those uses have a very low penetration rate so far.
"I think chatbots only really scratched the surface of today's AI capability." — Ewan Bowerbank
"So I think this ultimately this cycle could play out for a longer duration than the market currently anticipates." — Ewan Bowerbank
