Gartner reiterates warning: the $3.5 trillion AI infrastructure investment is at risk, and the return is difficult to support huge expenses

The Zhitong Finance App learned that Wall Street research and consulting agency Gartner stuck to last week's forecast that investment of up to $3.5 trillion in artificial intelligence (AI) infrastructure may be at risk because the market is worried that inflated AI capital expenses may not bring corresponding revenue.

John Lovelock, chief forecaster at Gartner, said on Monday that current industry returns are simply insufficient to support the amount of capital being invested. Gartner released a report last week saying that by 2030, most emerging cloud service providers will cease to exist, which could trigger a broader correction in the stock market.

“The market is facing a serious timing mismatch, and there is an oversupply of computing power.” Lovelock said.

“Currently, we have more computing power than we need, and large amounts of terms and processing power are being delivered through a freemium plan.” Lovelock said on Monday, “Every participant in the AI competition is vying for the position of 'last survivor'. In the AI competition that Gartner tracks, almost every market could evolve into a duopoly pattern.”

According to Gartner's analysis, the pattern of commercial duopoly in major cutting-edge model fields is being shaped around Anthropic and OpenAI. Lovelock said that the huge computing assets built by independent service providers (that is, emerging cloud service providers) to serve this dual oligopoly pattern require cash flow support, but cash flow did not grow at the same time as the previous cost.

Gartner's warning is seen as one of the triggers for the sharp decline in the AI computing power sector in this round. Emerging cloud service provider CoreWeave (CRWV.US) closed down 0.4% on Monday, after a cumulative decline of more than 25% for the week ending October 16. However, its peers Iren (IREN.US), Nebius (NBIS.US), and Applied Digital (APLD.US) all closed higher on Monday after experiencing a sharp correction last week.

Revenue deceleration and capital mismatch

Lovelock's research emphasizes that between 2027 and 2030, overall AI revenue will not be enough to make planned capital expenditure profitable returns. This cautious attitude is also reflected in the slowing financial growth of the underlying model company.

For example, Anthropic's quarterly revenue growth slowed significantly, from 140% in the second quarter to 45% in the third quarter. Analysts pointed out that Anthropic's quarterly revenue of US$16.8 billion is still small compared to the more than US$5 trillion that hyperscale cloud vendors are expected to spend to build ecosystems by 2030.

Lovelock also said that AI should be viewed as a foundational technology rather than an isolated market.

US stocks have rebounded, but caution remains

Gartner's report had a significant impact on market sentiment and increased stock market volatility. Analysts Wolfe pointed out that the market was already tight when the Gartner report was released, and warned that emerging cloud service providers are particularly vulnerable to infrastructure asset depreciation.

For the week ending October 16, the S&P 500 closed down 2%, the Nasdaq Composite Index fell 4%, and investors withdrew from booming technology stocks. Over the same period, the Dow Jones Industrial Average rose 0.7%.

On Monday, technology stocks rebounded strongly, driving the NASDAQ up more than 1%, and the S&P 500 index up 0.41%.