AI Downturn Odds Rise Amid Alibaba Profit Hit and Capex Fatigue
· flowframe Pulse
The probability of a late-2026 AI downturn rose to 20% following Alibaba’s report of a 74% plunge in operating income, which management attributed to aggressive infrastructure spending. This move reflects broader market anxiety regarding 'hyperscaler capex sustainability' as Big Tech firms struggle to maintain free cash flow amidst nearly $700 billion in projected annual AI investments.
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