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On this page

1. TL;DR

  • 1. TL;DR
  • 2. Key findings
  • 3. Macro / sector context
  • 4. Data & evidence
  • 5. Investment implications
  • 6. Primary risks & assumptions

On this page

  • 1. TL;DR
  • 2. Key findings
  • 3. Macro / sector context
  • 4. Data & evidence
  • 5. Investment implications
  • 6. Primary risks & assumptions
Technology/March 16, 2026/2 min read/ubs.com

E pluribus unum: The Internet | 12 Mar 2025 | 250 years of US innovation | Issue 6 | UBS

Source
Source

1. TL;DR

The internet evolved from a decentralized Cold War defense project into a global commercial fabric, now entering a new phase of AI-driven productivity and terabit-scale connectivity through 6G and optical innovations.


2. Key findings

  • Packet Switching: This decentralized architecture ensures network resilience by routing data through redundant nodes (p.5).
  • Protocol Standardization: TCP/IP and Ethernet transformed fragmented local networks into a unified, global system (p.7).
  • Fiber Optic Revolution: Pure glass fibers carry 65,000x more data than copper, breaking 1970s bandwidth constraints (p.5).
  • Commercialization Pivot: The 1995 Netscape IPO shifted the web from an academic tool to a universal commercial interface (p.7).
  • Infrastructure Foundation: 1990s overinvestment in fiber laid the physical groundwork for today's cloud and mobile economies (p.9).

References

  1. Original source (ubs.com)

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Reading

Published
March 16, 2026
Read time
2 min read
Progress0%
  • Wireless Evolution: 6G technology is projected to reach speeds >1 TB/s by 2030, merging mobile and fixed fabrics (p.3, 10).

  • 3. Macro / sector context

    • National Security Origins: Designed to replace vulnerable hierarchical phone networks with a system capable of surviving nuclear attack (p.4).
    • General-Purpose Technology: Like electricity, the internet creates entirely new markets (e-commerce, SaaS) rather than just optimizing old ones (p.2, 9).
    • Distributed Power: Computing has migrated from central mainframes to PCs, then to the Cloud, and now to "Edge AI" (p.6, 10).
    • The Zettabyte Era: Massive data growth is now driven by AI bots, which account for approximately 40% of all web traffic (p.6).

    4. Data & evidence

    • Consumption Growth: US monthly broadband use grew from 344GB (2018) to a projected 767GB by 2025 (p.3 / Infographic).
    • Market Saturation: US internet adoption rose from 14% in 1995 to 96% in 2025, signaling the maturity of the digital economy (p.3 / Web Facts).
    • Cost Efficiency: Network survival for carriers requires a consistent 35% annual reduction in the unit cost-per-bit (p.9).

    5. Investment implications

    • Buy/Overweight Optical Infrastructure: AI demands 1.6Tbps transmission speeds, requiring massive hardware upgrades in the optical layer (p.10).
    • Positive on Edge AI: The "networked layer of intelligence" favors firms integrating AI into local devices and high-speed data tokens (p.10).
    • Neutral on Legacy Carriers: Incumbents face high capex demands for 6G while battling persistent deflationary trends in data pricing (p.9).

    6. Primary risks & assumptions

    • Valuation Bubble: Current AI infrastructure spend risks mirroring the 1990s, where build-out outpaced immediate revenue (p.8).
    • Monetary Policy: Like the 2000 crash, Federal Reserve tightening is a primary threat to speculative technology valuations (p.8).
    • Technical Bottlenecks: Success assumes "photonic computing" can overcome electrical bottlenecks to manage AI heat/energy loads (p.10).
    • Protocol Integrity: The network’s value relies on voluntary adherence to open global standards rather than "walled gardens" (p.2, 7).
    • Deployment Horizon: Assumes a base case where 6G enters the commercial cycle by 2030 with 35% annual cost-per-bit drops (p.3, 9).

    "Brookfield's the largest infrastructure owner in the world... We drew a pipeline and we showed all the different components of the payments ecosystem on a pipeline and said it's like a pipe that moves any commodity except what it's moving…