Shen Wan Hongyuan released a research report saying that as free cash flows from leading cloud vendors turn negative one after another, market concerns about the sustainability of AI capital expenditure are increasing day by day. The market's pricing logic for AI is shifting from “capital expenditure expansion” to “financing and cash flow constraints.” Looking back, whether profit expectations can be fulfilled at the micro level and whether the Federal Reserve will raise interest rates at the macro level are the keys to whether AI's “money-burning model” can continue. The bank believes that at a micro level, compared to the Internet bubble period, the current financial indicators of leading US technology companies are steady, and the increase in profit is far greater than the increase in supermarket values; at the macro level, comprehensive employment is weak, inflation is cooling, and economic momentum is slowing down, and fundamentals do not yet support the Fed's immediate interest rate hike.

Shen Wan Hongyuan released a research report saying that as free cash flows from leading cloud vendors turn negative one after another, market concerns about the sustainability of AI capital expenditure are increasing day by day. The market's pricing logic for AI is shifting from “capital expenditure expansion” to “financing and cash flow constraints.” Looking back, whether profit expectations can be fulfilled at the micro level and whether the Federal Reserve will raise interest rates at the macro level are the keys to whether AI's “money-burning model” can continue. The bank believes that at a micro level, compared to the Internet bubble period, the current financial indicators of leading US technology companies are steady, and the increase in profit is far greater than the increase in supermarket values; at the macro level, comprehensive employment is weak, inflation is cooling, and economic momentum is slowing down, and fundamentals do not yet support the Fed's immediate interest rate hike.