Alternative Investing Report - July 17, 2025

*as of 7/16; Sources: S&P, BTC, FTSE, DJRE, CL50

The backbone of the AI boom rests on the data centers that provide the massive amounts of computing power needed by the industry. Tech companies are now committing major capital to build their own data centers, including CoreWeave, which is spending $6 billion to build one in Pennsylvania, Google, which has committed $25 billion, and Meta, which is spending hundreds of billions across the U.S. The asset manager Blackstone is also planning to spend $25 billion to build its own data centers and power plants to fulfill their energy needs.

➨ TAKEAWAY: The enormous amount of capital being devoted to AI infrastructure could pay off in the long run for both the AI and tech companies as well as associated real estate ventures. However, there is a risk that by the time these centers get built that they could be out of date or that they won’t be built quickly enough to keep up with the growing needs of the sector. China is already building underwater data centers, and companies are looking into building data centers in space and even on the Moon - yes, the Moon. Join next week’s session on how investors can participate in the energy sector to dig deeper.

In a highly anticipated sale — a 10’8” long Ceratosaurus skeleton with 139 original fossil bones — sold for a whopping $30.5 million at Sotheby’s, well above the pre-sale estimate of $4 million - $6 million. In the same auction, the largest Martian meteorite on Earth sold for $5.3 million, also above its high estimate of $4 million, and a T-Rex foot sold for $1.76 million compared to its high estimate of $350,000.

➨ TAKEAWAY: These sales show the strong appeal of truly unique and rare items, as both dinosaur fossils and space-related items have recorded a number of high-end sales over the past few years. While these seven-figure items are out of reach for typical collectors and investors, the success of these sales and media attention it brings is promising for the asset class as a whole.

💵 Middle market troubles: A report that analyzed data from more than 1,200 privately owned middle market companies is predicting that they could face record levels of bankruptcy this year, which could lead to a wave of defaults that would affect the private credit sector.

🏢 Retail vacancies increase: Continuing the trend across other sectors of commercial real estate, the national vacancy rate for retail real estate ticked up 10 basis points in Q2, with leading activity dropping by 5.2% and rent falling by 0.4%.

📊 PPI report: Both the producer price index (PPI), a measure of inflation, and core PPI, which excludes food and energy costs, showed no change in June, below the 0.2% gain that had been forecasted. On an annual basis, PPI is up 2.3% and core PPI is up 2.6%, just slightly above the Fed’s 2% target.

🚀 VC fundraising: While the amount of VC dollars going to startups has increased so far in 2025, the amount of capital the VC firms themselves have raised is on pace to fall 33.7% year-over-year, and the number of funds closed would be the lowest in more than a decade.

🪙 House advances crypto bills: The three crypto bills expected to pass the House this week cleared a procedural step after a number of roadblocks, with final votes expected to come as soon as today.

🎬 Darth Vader’s lightsaber: The light saber used by Darth Vader in “The Empire Strikes Back” and “Return of the Jedi” will be sold this September and carries a pre-sale estimate of $1 million - $3 million. It is the first ever main lightsaber from the original Star Wars trilogy to ever come to auction.

While American AI startups OpenAI, Anthropic, Perplexity, and xAI have garnered a disproportionate share of media attention and fundraising, the Chinese government and companies are spending billions of dollars on AI infrastructure in order to close the gap. Chinese companies like DeepSeek, AliBaba, and even TikTok parent company ByteDance are developing AI models to compete with American companies. Now, a ban that prevented chipmaker Nvidia from selling AI chips to China has been reversed and CEO Jensen Huang is hoping to sell more advanced chips there in the future. AI looks to be the next frontier for competition between the U.S. and China, and investors in the sector should pay close attention to how it develops.