"The AI news cycle of the summer captured themes including the challenge of starting a career, the importance of technology in the China/U.S. trade war, and mounting anxiety about the impact of the technology. But in terms of finance and investing, Deutsche Bank sees markets "on edge" and hoping for a soft landing amid bubble fears. In part, it blames tech CEOs for egging on the market with overpromises, leading to inflated hopes and dreams, many spurred on by tech leaders' overpromises."
"Still, Wall Street is not Main Street, and Deutsche Bank notes troubling math about the data centers sprouting up on the outskirts of your town. Specifically, the bank flags a back-of-the-envelope analysis from hedge fund Praetorian Capital that suggests hyperscalers' massive data center investments could be setting up the market for negative returns, echoing past cycles of "capital destruction." AI hype and market volatility AI has captured the market's imagination, withCox and Abrudan noting, "it's clear there is a lot of hype.""
Summer AI enthusiasm soured as investors worried that the technology pushed Big Tech into frothy valuation territory prone to sharp corrections. Markets are tense and seeking a soft landing amid bubble fears. CEO overpromises and venture-capital inflows have lifted startup valuations and encouraged inflated expectations. A surge of legal actions targets multiple AI players. A hedge fund's back-of-the-envelope analysis warns that hyperscalers' enormous data-center spending could produce negative returns and mirror past capital-destruction cycles. Online interest in AI spiked dramatically, with search volumes far exceeding prior crypto peaks, signaling elevated hype.
Read at Fortune
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