The article argues that while artificial‑intelligence (AI) hype has driven massive investment globally, the sustainability of that boom is far from guaranteed. Many AI‑related firms — especially in regions outside the U.S. — have based their growth on optimistic assumptions about demand for AI services and products. As financial markets tighten and the gap between hype and real revenue grows, the “AI cycle” threatens to break first in Asia, where some firms are more exposed and less diversified.
Rising valuations don’t yet match real earnings
According to the piece, despite soaring valuations tied to AI, many companies haven’t delivered proportional returns. For some “moonshot” firms, investors are banking on future breakthroughs rather than current profits. This creates a precarious situation: if growth disappoints — whether due to regulatory headwinds, slower adoption, or economic slowdown — stock prices could tumble. The disparity between expectations and fundamentals is particularly acute in companies based in or relying heavily on Asian markets.
Asia’s structural vulnerabilities make the risk higher
The article points out that some Asian markets have structural disadvantages compared to U.S. or European firms: weaker ecosystems for scaling AI, less access to capital, and greater sensitivity to global economic shocks. Because of this, if the global AI boom slows or capital becomes scarcer, Asian AI players may suffer more acutely. The “first cracks” in the AI exuberance may well emerge there — potentially triggering a broader correction across AI‑dependent sectors.
The analysis serves as a warning to investors, tech leaders, and regulators alike: the current surge in AI enthusiasm needs sober reflection. Betting on exponential growth without realistic paths to revenue or resilience may lead to damaging market corrections. For policymakers, it highlights the importance of balanced regulation and support for sustainable AI development — not just hype. For now, Asia appears to be where the AI bubble may burst first, unless fundamentals catch up with promise.
