Chief Investment Officer Warns: AI Market Relies on Investor Confidence

Brad Conger, Chief Investment Officer of Hatteras Capital, warned that AI trading is entering a stage of "stranger goodwill," as large cloud service providers see their free cash flow weakening and increasingly rely on debt to maintain operations. He stated that investors are presuming future cash flows will rebound, but this notion may only be a "self-soothing illusion." The scale of AI-related debt has reached approximately $570 billion, and Castle Investments predicts that this debt will increase by over $500 billion by 2028. Conger also warned that substantial AI capital expenditures will lead to high depreciation costs, which will suppress corporate earnings in the coming years.