Apollo economist warns Chinese AI gains and falling token prices may burst the AI bubble

Industry Impact 4
โดย Moneywise.com under the title·Read original
Summary · why it matters

Apollo chief economist Torsten Slok warns that the spread of Chinese AI models and declining token prices could derail profitability for AI firms and trigger a market correction. Hyperscalers Amazon, Alphabet, Meta, Microsoft, and Oracle generated a record $260 billion in free cash flow in 2024 but are projected to turn negative this year, while chipmakers Nvidia, Micron, Broadcom, and Applied Materials are expected to generate $430 billion in free cash flow over the next 12 months. Slok notes that Chinese firms like DeepSeek and Moonshot AI are gaining ground by offering similar features at lower cost, and companies are increasingly seeking to cut token spending. If hyperscaler cash flows fall short, the outsized weight of the Magnificent Seven in the S&P 500 could drag equity markets into a correction or even a recession.

Impact on stocks 10

Artificial Intelligence · 6 stocks
Amazon.com Inc
AMZN
▼ NegativeCapitalrelevance

Hyperscaler free cash flow projected to turn negative this year, threatening AI capex and profitability.

Alphabet Inc Class C
GOOG
▼ NegativeCapitalrelevance

Hyperscaler free cash flow projected to turn negative this year, threatening AI capex and profitability.

Meta Platforms Inc.
META
▼ NegativeCapitalrelevance

Hyperscaler free cash flow projected to turn negative this year, threatening AI capex and profitability.

NVIDIA Corporation
NVDA
▼ NegativeDemandrelevance

Nvidia's AI chip demand is threatened by falling token prices and Chinese AI competition, which could reduce hyperscaler spending on its GPUs.

Microsoft Corporation
MSFT
▼ NegativeDemandrelevance

Hyperscalers like Microsoft are projected to turn free cash flow negative this year, and falling token prices and Chinese AI competition threaten demand for their AI services.

Broadcom Inc
AVGO
▼ NegativeDemandrelevance

Chinese AI competition and token price declines could reduce demand for Broadcom's chips.

Semiconductors · 2 stocks
Applied Materials Inc
AMAT
▼ NegativeDemandrelevance

Chinese AI gains and falling token prices may reduce demand for chipmaking equipment as AI spending slows.

Micron Technology Inc
MU
▼ NegativeDemandrelevance

Micron, as a chipmaker, faces risk from declining token prices and hyperscaler cash flow shortfalls, which could reduce demand for memory chips used in AI.

Cloud & Digital Infrastructure · 1 stocks
Oracle Corporation
ORCL
▼ NegativeDemandrelevance

Oracle, as a hyperscaler, is projected to turn free cash flow negative, and falling token prices and Chinese AI competition pressure its cloud AI business.

Aging Population · 1 stocks

Theme Impact 8

Off-coverage companies 2

DeepSeekPrivate± Mixed
relevance

Moonshot AI (北京月之暗面科技有限公司)Private± Mixed
relevance

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