Why the "S&P 493" is finally catching up.

For two years, the market has been a "Winner Take All" game dominated by the AI chipmakers. But history tells a different story. During the 2000–2008 internet era, market concentration actually fell as the internet's productivity gains "diffused" across the whole economy.

We are entering that phase with AI. The real gains are moving from the companies building AI to the companies using AI to slash costs and expand margins. This is why the Equal Weight S&P 500 (RSP) is finally starting to outperform the top-heavy SPY.

I’m breaking down the "Diffusion Thesis" and the shift in market leadership: