“We are moving into later-cycle dynamics,” Farris says. “None of these stories are new anymore. The investment numbers are already very, very large and so once you have got a very large base, it’s very difficult to produce high growth rates.”
It is hard to make sense of the AI investment story these days. Leading frontier AI companies like OpenAI and Anthropic are targeting trillion-dollar IPO valuations. Yet South Korea’s memory chip giants Samsung Electronics and SK Hynix weathered a brief selloff in early June. Samsung Electronics and SK Hynix shares fell by around 10% and 8%, respectively, on June 8, before rebounding by 9% and 16%, respectively, on June 9.
Ray Farris, chief economist at Eastspring Investments says investors should not write off AI as an investment theme just yet. Slowing growth does not mean that there is no growth. Even though the sector is a lot more mature than it was just a few years ago, there is still room for the industry to grow.
