Recently, the stock prices of the US tech "Big Seven" have experienced a continuous correction. Except for Meta, the stock prices of the other six companies have fallen sharply in the past 5 trading days. The main reasons include:
- Slowing growth in core business revenue
- Continuous increase in AI investment but unclear benefits
- Long return cycle for AI investments
Nevertheless, Google, Microsoft, Amazon, and others have announced they will "continue to increase AI investments." Some predictions suggest that AI investments may take at least 10 years to generate returns.
Currently, Wall Street's most closely watched indicator is the capital expenditure of tech giants, including AI investments, which is also considered a key factor highlighting the AI bubble. The "Big Seven" are expected to reach a record high of $400 billion in capital expenditure this year.
In contrast to the high AI investments, the core business growth of tech giants has begun to slow down or fall short of expectations. For example:
- Google's core advertising business growth rate is only half that of Meta
- Microsoft's Azure cloud business growth is below expectations
- Amazon's e-commerce business performance is below expectations
- Apple's phone sales are declining in the Chinese market
In comparison, Meta's performance growth is more evident, and it has not further increased its full-year capital expenditure cap.
For small and medium-sized AI companies, the challenges brought by the AI bubble are even more severe. Multiple AI startups have been acquired due to high inference costs and difficulties in commercialization.
Reducing AI usage costs has become an urgent problem for the industry to solve. Experts believe that AI can only truly become widespread and bring about an economic revolution if costs decrease significantly.
The future growth of tech giants mainly depends on two aspects:
- Incremental growth from the Chinese market
- Further reduction in costs such as computing power and electricity, as well as finding practical applications for AI