The Physical Layer of AI
AI needs a physical layer. I own it.
Eight layers force the model out of the data center and into the real world. Power on the bottom, quantum on top. Every layer has a bottleneck. Every bottleneck has a name. The five anchors sit on the four that bind first.
L01
Power & Grid
nuclear · CCGT · interconnect queue
VST
CEG
TLN
L02
Compute & Memory
HBM · fabs · custom silicon
MU
AVGO
NVDA
L03
Networking
Ethernet fabric · scale-up · DPUs
AVGO
ANET
L04
Photonics
co-packaged optics · InP · interferometers
ALMU
LITE
COHR
L05
Datacenters
neoclouds · build-to-suit · sovereign
NBIS
CRWV
L06
Cooling
direct-to-chip liquid · immersion
VRT
+ watching 3
L07
Defense AI
autonomy · ISR · munitions
PLTR
KTOS
L08
Quantum
photonic · trapped-ion · materials
watching · no positions
Anchor layer · capital lives here
Watch layer · sized small or zero
Tilt for shape, not for show. Tap a layer to read the bottleneck.
▌ The eight, in plain text
Each layer, named bottleneck, names held.
L01
Power & Gridanchor layer
Gigawatts before tokens. Behind-the-meter and PPA pricing reset utility multiples. Nuclear restarts get the headline. Gas peakers do the work.
VST
CEG
TLN
Interconnect queue5+yr wait, MISO + PJM
L02
Compute & Memoryanchor layer
HBM is the gating part. Three suppliers, two fabs that matter, demand outruns supply through 2027. Custom silicon priced like a service.
MU
AVGO
NVDA
HBM yield3-letter supplier list
L03
Networkinganchor layer
Ethernet wins the scale-out fight. 90% of switch silicon shipped by one vendor. InfiniBand is the old story. UEC is the new one.
AVGO
ANET
Tomahawk SKU mix800G to 1.6T ramp
L04
Photonicsanchor layer
Copper hits a wall around 224G/lane. Co-packaged optics moves the wall. InP and quantum-dot lasers are the substrates that scale.
ALMU
LITE
COHR
InP wafer supplyNASA-awarded 4/21
L05
Datacentersanchor layer
Neoclouds take the workloads hyperscalers cannot land fast enough. Microsoft and Meta both on the backlog. Sovereign anchors fund the buildout.
NBIS
CRWV
Site power$50B backlog
L06
Coolingwatch layer
Air cooling stops working at 1kW per rack. Direct-to-chip and immersion are the only paths past it. Vendor list still short. Quality of revenue still mixed.
VRT
Rack density1kW air ceiling
L07
Defense AIwatch layer
Autonomy and ISR are the only DoD line items that grow no matter who wins November. Software-defined warfare procurement is real, slow, and budgeted.
PLTR
KTOS
Procurement cycleFY26 NDAA
L08
Quantumwatch layer
Not a 2026 cash flow story. A 2030 optionality story. Read the papers. Track the materials companies. Stay out of the names that promise advantage by Christmas.
watching, no positions
Coherence timeread, do not own
I buy the exact raw materials, hardware machines, and power plants that force artificial intelligence to actually exist and operate in the real world.
▌ Quinn Byars · operator · 05.06.2026