The AI-fueled transformation of big tech is entering dangerous territory, with surging capital expenditures threatening to erode profit margins, dismantle asset-light models, and reduce once-high-growth giants like the Magnificent Seven into utility-like low-return entities.
That's the view of Kai Wu, founder of Sparkline Capital, who recently highlighted that Wall Street's AI darlings are shifting toward a riskier, capital-heavy model that has historically underdelivered for investors.
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