AI boom enters its ‘nasty’ phase as economic realities set in

Artificial intelligence (AI) has entered its “nasty” phase – the fast-moving, volatile period when economic reality constrains ambitions and markets separate winners from losers. The capital expenditure boom, accelerated US-China competition and strategic retrenchment threaten to erase as much wealth as the industry’s unprecedented expansion has created. Returns on capital face mounting pressure to deliver outsize performance. Investors are wary and impatient, rotating portfolios towards...