JPMorgan Warns AI Industry 'Scissors Gap' Unsustainable; Key Shift From Capex to Monetization

According to a research report released by JPMorgan on Wednesday, July 1, the valuation gap between AI semiconductor and memory chip makers versus hyperscale cloud service providers such as Amazon, Microsoft, and Google has widened to an unsustainable level over the past year. The investment thesis is shifting from capital expenditure predictability to commercial viability. JPMorgan flagged that if cloud service providers' capex growth decelerates as market consensus expects—slowing from 100% year-over-year growth this year to 22% in 2027—the AI rally faces dual downsides. The firm identified two critical indicators to monitor: AI compute rental prices, which directly determine cloud platform profitability, and large language model token prices, both of which weakened in June after improving in April-May. JPMorgan emphasized that sustained improvements in these metrics are essential to validate the AI value chain's positive cycle.
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