10 Nov, 09:26

Bearish view on Big Tech AI CAPEX and cash flow

Bearish+0.05%

AI Summary

The author argues that AI capital expenditure has peaked due to funding constraints at major tech firms and rising interest rates, concluding that semiconductor investments no longer offer sufficient excess returns.

SoftBank is out of money neoclouds can't raise funds Big Tech's cash flow has turned negative (GOOG, META, AMZN) MSFT is starting to pull back from neoclouds deals OpenAI can't raise $30B; even $20B is in jeopardy Anthropic's IPO valuation keeps dropping Another rate hike expected in December All signs point to AI CAPEX having peaked—at least for this cycle Buying semiconductors no longer offers sufficient excess returns Personal view, FYI

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