I stopped asking what will grow. I started asking what growth cannot happen without.

Most investment research starts with growth.

Which industries are expanding? Which technologies are being adopted? Which markets are opening up? Which companies are positioned to benefit?

I have spent a lot of time thinking this way too. It is part of how I ended up looking at AI infrastructure in Saudi Arabia, the expansion of tourism, aviation and the wider Vision 2030 investment programme.

But over the past few months, I have found myself asking a slightly different question.

When something is expected to grow significantly, what has to exist for that growth to happen?

It sounds like a small change, but it has changed where I look.

Take AI. The obvious investment story is the models, the chips and the companies building them. But the more I looked at Saudi Arabia's AI ambitions, the further down the chain I found myself going.

AI needs compute. Compute needs data centres. Data centres need electricity, grid connections, cooling, fibre and land. All of that needs financing.

Eventually, you arrive at something that cannot expand as quickly as demand.

That is usually where things become interesting.

There is a temptation to take this idea and turn it into a simple investment rule: find whatever is scarce, buy the company that owns it and wait.

I don't think it works that way.

Scarcity can be extremely valuable, but only if the company controlling the scarce asset can turn that position into attractive returns for shareholders.

That depends on a lot of things.

How difficult is the asset or capability to replicate? Can customers substitute something else? Does the company actually have pricing power? How much capital does it need to keep investing? How much debt is involved? What return is it earning on that capital?

And then there is the question I always come back to: what price am I being asked to pay for those returns?

The more I thought about it, the more I realised that different bottlenecks produce very different economics.

ASML is probably the cleanest example.

The Dutch company is the world's only supplier of extreme ultraviolet lithography systems, technology used in the production of many of the world's most advanced semiconductors.

If demand for advanced chips continues to grow, manufacturers need more advanced lithography capacity. But building another ASML is not simply a question of putting enough money behind a competitor. The technology, supplier relationships and knowledge have taken decades to develop.

That scarcity shows up in the financials.

ASML generated €32.7 billion of revenue and €9.6 billion of net income in 2025. By July this year, it had raised its 2026 revenue guidance to €43 billion to €45 billion as demand continued to strengthen.

This is the version of the bottleneck thesis investors naturally want to find: something the market increasingly needs, very few alternatives and a company capable of turning that position into strong margins and cash flows.

But most bottlenecks don't look like ASML.

Ma'aden is more complicated, which is why I find it interesting.

Saudi Arabia is trying to make mining the third pillar of its economy, alongside oil and petrochemicals, and Ma'aden sits at the centre of that ambition. Its exposure to phosphate, aluminium, gold and other minerals gives it a position in supply chains that are becoming increasingly important as agriculture, manufacturing and electrification expand.

Its 2025 results were strong. Revenue reached SAR38.6 billion, up 19%, while net profit rose to SAR7.3 billion, up 156%. The increase was helped by stronger production, higher commodity prices and the first full-year inclusion of Alba, including a one-off gain.

But Ma'aden highlights something important about the scarcity argument.

Owning scarce resources is not the same thing as owning the price.

A mining company can control an attractive resource base and still operate in markets where commodity prices are determined globally. It can benefit when supply is tight and prices are strong, then experience a very different set of economics when the cycle turns.

Mining is also capital intensive. New mines, processing facilities and expansions require enormous amounts of money before they generate cash.

So when I look at Ma'aden through this framework, identifying the scarcity is the easy part.

The harder questions are around production costs, capital expenditure, commodity cycles and, ultimately, the return generated on all the capital being deployed.

That is much more useful to me than simply concluding that the world needs more minerals, therefore mining companies should do well.

This question gets even more interesting with a company I already own.

I originally bought STC for reasons that had very little to do with AI. It is a large, profitable telecom company with strong cash generation and a dividend that fits the income side of my Saudi portfolio.

Center3 has made me look at another part of the business more closely.

Center3 sits underneath a lot of the digital infrastructure Saudi Arabia is trying to build. It operates data centres and subsea cables and provides the connectivity that cloud computing and AI infrastructure require.

The company says it has already invested $3 billion and plans another $10 billion through 2030 as it works towards 1GW of data-centre capacity.

More recently, Center3 and Saudi Electricity Project Development Company announced a partnership to plan the power infrastructure required for large-scale data centres, including power feasibility studies, substation design and regulatory groundwork.

That caught my attention because it makes the dependency very clear.

We can talk about gigawatts of Saudi AI capacity, but those data centres cannot operate until somebody provides the electricity, connects the grid, builds the substations and provides the network carrying the data.

There is clearly an infrastructure opportunity here.

But $10 billion of planned investment also reminds me why I have to be careful with the word "opportunity."

That money has to earn a return.

As an STC shareholder, the interesting question is not whether Saudi Arabia will need more data centres and connectivity. I think it will.

The question is whether Center3 can earn returns on that capital that justify the amount being invested.

Utilisation matters. Customer contracts matter. Financing costs matter. Pricing matters. And the return on invested capital matters.

Being necessary is valuable. It is not enough on its own.

This is probably the biggest thing that has changed in how I use this idea.

Finding a bottleneck does not make me want to buy something immediately.

Ma'aden is not currently in my portfolio. Neither is Saudi Electricity. That does not make their position in Saudi Arabia's growth story any less interesting.

It simply means I have separated two questions that I might previously have treated as one.

Is this asset going to become increasingly important?

And:

Is this a good investment at today's price?

Those are very different questions.

A company can own something the world desperately needs and still destroy shareholder value through poor capital allocation.

A regulated utility can be indispensable and still earn mediocre returns.

A mining company can own extraordinary resources and still be exposed to a difficult commodity cycle.

And a fantastic company can be a terrible investment if I pay too much for it.

So the bottleneck is where my research starts, not where it ends.

I am not going to stop looking for growth. Growth still matters.

What has changed is where I start when I see a big new theme.

When I read about AI investment, Saudi tourism, aviation expansion, mining or industrial growth now, I try to work backwards.

What has to exist for this to happen?

Where could capacity become constrained?

Who controls that capacity?

How easily can someone else replicate it?

And then I get to the questions that matter to me as an investor. Is the company actually making money from its position? What return is it earning on the capital deployed? What does that capital cost? And how much of the opportunity is already reflected in the share price?

Sometimes that process leads straight back to the obvious company.

Sometimes it takes me two or three steps further down the supply chain.

And sometimes I find a genuine bottleneck and still don't find an investment I want to make.

I think that last outcome is just as useful.

Finding something the world cannot do without is only the beginning.

I still have to decide whether I want to own the business providing it, and at what price.

Sources: ASML 2025 Annual Report and Q2 2026 results; Ma'aden FY2025 results and Saudi Exchange disclosures; Center3 1GW data-centre expansion announcement; Center3 and Saudi Electricity Project Development Company data-centre energy infrastructure announcement.

The Quiet Compounder is for educational purposes only and is not financial advice. Always do your own research or consult a licensed advisor before making investment decisions.