{"id":127229,"date":"2026-08-02T13:20:19","date_gmt":"2026-08-02T13:20:19","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/127229\/"},"modified":"2026-08-02T13:20:19","modified_gmt":"2026-08-02T13:20:19","slug":"opinion-ai-boom-enters-its-nasty-phase-as-economic-realities-set-in","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/127229\/","title":{"rendered":"Opinion | AI boom enters its \u2018nasty\u2019 phase as economic realities set in"},"content":{"rendered":"<p><a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/topics\/artificial-intelligence?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">Artificial intelligence<\/a> (AI) has entered its \u201cnasty\u201d phase \u2013 the fast-moving, volatile period when economic reality constrains ambitions and markets separate winners from losers.The <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/tech\/big-tech\/article\/3352068\/chinese-firms-face-pressure-ai-investments-us-peers-spending-keeps-soaring?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">capital expenditure boom<\/a>, accelerated US-China competition and strategic retrenchment threaten to erase as much wealth as the industry\u2019s unprecedented expansion has created. Returns on capital face mounting pressure to deliver outsize performance. Investors are wary and impatient, rotating portfolios towards companies with clearer paths to profitability, as <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/tech\/tech-trends\/article\/3362574\/how-sell-flashy-ai-focused-us-hedge-fund-wake-call-chinese-investors?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">the recent sell-off<\/a> indicates.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">Nowhere is the scale of the transition more apparent than among the hyper-scalers. Amazon, Alphabet, Microsoft and Meta are collectively expected to spend nearly US$700 billion on capital expenditure in 2026 alone.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">Recent earnings releases illustrate the divergent consequences. Meta issued a disappointing revenue forecast as it struggled to prove it can monetise AI, while Microsoft reported record and accelerating cloud revenue, which reinforced the \u201cAI trade\u201d.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">Analysts estimate that between US$4 trillion and US$8 trillion will be invested globally in AI infrastructure over the next five years \u2013 arguably the largest investment cycle ever.<\/p>\n<p>The frenzy is equally under way in China. Chipmaker <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/business\/china-business\/article\/3354223\/why-chinese-dram-maker-cxmts-ipo-attracting-so-much-attention?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">ChangXin Memory Technologies<\/a> soared nearly 470 per cent in its recent market debut in Shanghai, the mainland\u2019s biggest initial public offering (IPO) since 2010. At least six Chinese start-up AI companies are reportedly preparing IPO launches by 2027.<\/p>\n","protected":false},"excerpt":{"rendered":"Artificial intelligence (AI) has entered its \u201cnasty\u201d phase \u2013 the fast-moving, volatile period when economic reality constrains ambitions&hellip;\n","protected":false},"author":2,"featured_media":127230,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,2477,1483,321,25,18235,6657,33028,387,11387,138,1122,320,9603,58,4516],"class_list":["post-127229","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-ai","tag-alibaba","tag-alphabet","tag-amazon","tag-artificial-intelligence","tag-bank-for-international-settlements","tag-bytedance","tag-changxin-memory-technologies","tag-china","tag-deepseek-v4","tag-ipo","tag-meta","tag-microsoft","tag-moonshot-ai","tag-nvidia","tag-shanghai"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/127229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=127229"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/127229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/127230"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=127229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=127229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=127229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}