Chief Economist of New Fire, Fu Peng: The Window for AI Infrastructure is Coming to an End
Fu Peng, Chief Economist of New Fire Group, stated at the monthly client private meeting that the AI industry is transitioning from the midstream to the downstream phase, with the infrastructure layer having reached maturity, while the downstream application layer has yet to see significant breakthroughs. He pointed out that the free cash flow of tech giants turned to zero in the second quarter, and if capital expenditures continue, they will need to be financed at a cost of 6-7%. If there are no returns from the application layer within six months to a year, the growth rate of capital expenditures will decline, putting pressure on the entire upstream chain. Regarding digital assets, Fu Peng believes that Bitcoin has evolved into a standard financial asset. In an environment of tightening liquidity, Bitcoin, as a purely liquid asset, has been the first to shrink its circle, becoming a leading indicator of market liquidity. He suggests that investors pay attention to the changes in free cash flow of major companies and the structural data of the US options market to identify key turning points.
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