Technology & Telecommunications

Another week, another artificial intelligence (AI) powered disruption. This time, two big announcements from China that may threaten the valuations of the big U.S. hardware-centric tech giants. 

The news

First, the release of AI-produced hyper-realistic movie-quality video from the Chinese company ByteDance-owned AI Seedance 2.0 has gone viral and simultaneously rocked Hollywood by completely reframing what the movie industry thought was possible. continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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The artificial intelligence (AI) industry is currently grappling with what some experts call a ‘trillion-dollar math problem’. The numbers might not stack up because customers might simply lack the funds to spend on AI tools to allow hyperscalers to achieve a decent return on their AI infrastructure investment.

With hyperscalers projected to spend US$3 trillion on AI infrastructure by 2029, the market faces a substantial revenue gap. To justify current valuations and maintain reasonable margins, AI services would need to generate revenue equivalent to 10 per cent of the entire U.S. Gross Domestic Product (GDP) of US$30 trillion. This represents a massive commercial risk; if expectations of an adequate return on investment in two or three years evaporate, this historic capital expenditure risks producing a multi-trillion-dollar overcapacity. continue…

by Roger Montgomery Posted in Market commentary, Market Valuation, Technology & Telecommunications.

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I joined Paul Turton on ABC Mornings to discuss how AI is evolving beyond simple prompts into autonomous agents that can act on our behalf, but warned that market expectations may be getting ahead of reality. With trillions set to be spent on infrastructure, current valuations imply adoption levels that look ambitious, raising the risk of overcapacity and corrections, particularly as AI begins to disrupt the software as a service model and pressure established data and information providers.

Listen from 36:40 here: ABC Newcastle Mornings

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by Roger Montgomery Posted in Market commentary, Radio, Technology & Telecommunications.

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Former CEO, public speaker and author, Jay Grewal once said, “When it comes to the final nail in your coffin, it doesn’t matter if it’s dull or sharp, it’ll still hold, because a lifetime of prior nails have helped seal that coffin shut.”

In what may prove to be merely another accumulated nail in the coffin of the artificial intelligence (AI) boom, the narrative on Wall Street shifted dramatically last week as the tech-driven optimism that has fueled the market for years hit a psychological and structural barrier. continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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Last year, I posted a blog entitled ‘But Nothing’s Changed’, describing how the artificial intelligence (AI) bubble and market boom could end. I explained how investors will realise that even though AI technology – hailed as the 4^th Industrial Revolution – will change the course of human history, it probably won’t do so tomorrow. And therefore, share prices were at risk of setbacks because there will be commercial bumps (delays in data centre builds, changes in interest rates, shortages of energy and water, and not all companies can win) along the way to an AI ‘utopia’. While timing a change in sentiment is impossible, the hype surrounding general-purpose technologies, including AI, makes such a change inevitable. It’s always been so. continue…

by Roger Montgomery Posted in Manufacturing, Market commentary, Technology & Telecommunications.

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While most currently consider bubbles a dangerous precondition for a stock market crash, they can also be better navigated by appreciating they’re a necessary step on the road to humanity’s advancement.

As I have noted previously, there’s a myriad of definitions for asset bubbles, but most fall into two camps: those that measure overvaluation and those that observe the behaviours and conditions that typically give rise to it.
This article was first published in The Australian on 20 December 2025. continue…

by Roger Montgomery Posted in In the Press, Investing Education, Market commentary, Technology & Telecommunications.

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Time Magazine has awarded the 2025 person of the year to…wait for it…a group of people. The architects of artificial intelligence (AI) have been nominated for this year’s cover.

Before the advent of digital magazines, billions were spent annually on buying physical magazines representing every topic and subculture known to man. And magazine cover trading became a contrarian way to invest. continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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Debt nuances

I just read the following sentence: “Graphic Processing Unit (GPU) rich clouds are now raising multi-billion-dollar debt with GPUs as collateral.”

It got me thinking… continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Investing Education, Market commentary, Technology & Telecommunications.

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Last night, on ABC’s 7.30 news report with Michael Rowland, I discussed whether surging investment in artificial intelligence (AI) is pushing large technology companies to unsustainable valuations. I noted that investors often become highly enthusiastic when new technologies emerge that are believed to reshape the world, but history shows this can inflate expectations. In the case of AI, the scale of spending by tech hyperscalers is immense, and to justify it they would need extraordinary levels of revenue.

Watch the full segment here: ABC News – Are AI investors causing tech companies to be overvalued?

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by Roger Montgomery Posted in Insightful Insights, Market commentary, On the Internet, Technology & Telecommunications, TV Appearances.

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From South Sea to AI: Artificial Intelligence (AI) companies seem to be asking investors the question: Just how long can growth be built on the question of future returns – and a productivity revolution – that are by no means guaranteed?

The South Sea Bubble of 1720 remains the archetype of a financial mania driven by exotic new ‘tech’, the promise of monopoly returns, and limitless public imagination.

At first, the idea of comparing the South Sea bubble to an AI boom 305 years later seemed far-fetched. AI is not, for example, a Ponzi scheme being promoted by those who fail or refuse to publish financials or forecasts of how profits will be made. continue…

by Roger Montgomery Posted in Investing Education, Market commentary, Technology & Telecommunications.

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