Posts from 2025

Industry experts suggest that the decline in stock prices of U.S. AI companies reflects a correction of market enthusiasm rather than a shift in fundamentals and is unlikely to impact long-term valuations. There are multiple reasons for this. The AI hardware market is experiencing shortages, driving up prices for components like DRAM and leaving many contracts unfulfilled.

The Capital Expenditure (CAPEX) of U.S. hyperscale and AI companies remains steady, driven by consistent demand and monetization. AI is enhancing efficiency across industries, driving financial returns that sustain strong demand. Lowering the cost of AI—much like the shift from mainframes to minicomputers and PCs—has not shrunk the market but has significantly expanded it. Microsoft’s CEO referencing Jevons Paradox was no coincidence. The paradox is named after William Stanley Jevons, a 19th-century English economist, who observed that technological improvements that increased the efficiency of coal use led to the increased consumption of coal in a wide range of industries. “It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption.” (W. Stanley Jevons, “The Coal Question,” 1865)