Hertel's chief investment officer Brad Conger warned that AI transactions are entering the “stranger's goodwill” stage, and the free cash flow of large cloud service providers is weakening, and they are increasingly relying on debt to maintain operations. He said that investors assume that cash flow will pick up in the future, and this idea is probably just an “illusion of self-comfort.” The size of AI-related debt has reached approximately $570 billion, and Castle Investment predicts that this debt will increase by more than $500 billion by 2028. At the same time, Conger warned that huge AI capital expenses will bring high depreciation costs, which will suppress corporate profits for years to come.

Hertel's chief investment officer Brad Conger warned that AI transactions are entering the “stranger's goodwill” stage, and the free cash flow of large cloud service providers is weakening, and they are increasingly relying on debt to maintain operations. He said that investors assume that cash flow will pick up in the future, and this idea is probably just an “illusion of self-comfort.” The size of AI-related debt has reached approximately $570 billion, and Castle Investment predicts that this debt will increase by more than $500 billion by 2028. At the same time, Conger warned that huge AI capital expenses will bring high depreciation costs, which will suppress corporate profits for years to come.