AI’s next wave: Stories you may have missed

Artificial intelligence (AI) is already transforming everything – from the way individuals search the internet to how efficiently small businesses run to what larger companies can accomplish. And, apparently, it’s not even close to being done disrupting the status quo.

There’s a new wave of capabilities called “world models” being researched right now that could impact us on even deeper levels.

World models are supposed to be much more interactive and predictive than current AI capabilities. Instead of working with the information a human presents it with, the new technology will theoretically “think” for itself by reading the environment around it and coming to logical conclusions.

Is there a pile of dishes sitting on the counter? A housemaid robot with world-model programming could go over and wash them without being told.

Is there a child crossing the street? A similarly set-up car will take the necessary actions to avoid him.

This predictive technology could apply just as easily to medical procedures, engineering, architecture… and the list goes on. That’s why tech companies of all sizes are pouring billions into world models – on top of the billions they’ve already spent on “regular” AI.

Big names like Alphabet (GOOG), Nvidia (NVDA), and Meta (META) are all onboard, of course. So is AMI Labs, a Paris-based startup that raised $1.03 billion two months ago for its world model research.

There’s money to be made here, without a doubt – but also significant risk, as is true whenever new concepts are introduced.

Do you remember my coverage of Fermi (FRMI) last year? It’s the data center real estate investment trust (REIT) that went public without a single working data center to its name.

Investors went crazy about Fermi’s IPO, valuing it at $21 per share for gross proceeds of $83 million. As I mentioned shortly after it debuted:

Today, however, after running into trouble after trouble – including potential customers backing out and lawsuits – it’s trading around $6.

As I’ve said before, this is why I don’t tend to recommend IPOs. And I definitely don’t recommend IPOs of companies that are only seven months old, as Fermi was, with no real property to its name.

None of that has stopped giant asset manager Blackstone Inc. (BX) from launching Blackstone Digital Infrastructure Trust (BXDC) on the market earlier this week . This “blind pool” data center REIT hasn’t acquired any assets yet… but still raised $1.75 billion in its IPO.

Now, it might be different this time considering how Blackstone manages more than $1.3 trillion in assets. Whereas Fermi was co-founded by former U.S. Energy Secretary Rick Perry, who – with all due respect – does not have that kind of clout.

Even so, I’m watching BXDC from the sidelines for the time being.

If you’re one of my regular readers, you’re very well aware that the Sunbelt is the economic place to be these days. Southern states such as Texas, Florida, the Carolinas, and more are seeing enormous inflows of new businesses, new jobs, and new residents as Americans seek out lower costs of living, lessened tax burdens, and fewer regulations.

But it looks like that surge has reached a tipping point.

That’s not to say there’s a shift away from the Sunbelt. Only that many of its big metros are getting oversaturated. And that’s pushing newer migrants past the also burgeoning suburbs into what CRE Daily described as “exurban boomtowns.”

To quote it directly, “fast-growing exurbs around Dallas, Houston, Phoenix, and Raleigh are outpacing major U.S. cities as buyers seek affordability and space.” That means they’re seeking – and finding – locations miles and miles away from downtown hotspots. For example, Fulshear, Texas, is now the fastest-growing city in the country, according to newly released Census Bureau data. Despite being about 35 miles west of Houston, its population has climbed from just 17,000 at the turn of the decade… to more than 64,600 in mid-2025.

Similar stories are playing out around other Texas locations, as well as North Carolina’s Research Triangle, and even the distinctly non-Sunbelt city of Boston, Massachusetts. Though, in that latter case, it’s not because of overcrowding. Boston’s taxes and regulations have surged so much in recent years that Boston-based workers are seeking residency anywhere else they possibly can.

Happy SWAN Investing!

Brad Thomas
Editor, The Wide Moat Daily

Real estate investment trusts (REIT) have been largely unloved for years. Ever since interest rates started going up, their stocks have been going down.

But I’m calling it: the end to that trend.

In this week’s Wide Moat Show, Nick Ward and I discuss Q1 REIT earnings… and the very good news I’m taking from it.

Catch the full episode right here.