The AI investment cycle is most likely to end not because US hyperscalers cut spending, but because markets start pushing back against the lack of returns, Global Brokerage firm Jefferies said in a report.
The report argued the turning point will come when investors focus on what it calls a massive wealth transfer from hyperscalers' balance sheets to North Asia. The combined market capitalisation of Korea and Taiwan has more than tripled from US$3.2 trillion at the start of 2023 to US$9.8 trillion, reflecting how much of the AI capex is flowing to chipmakers and suppliers in the region.
