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<Research>JPM: AI Capex Budget Unlikely to Change Rapidly in 2025/26; Semiconductor Sector to Remain Positive in Medium to Long Term
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Following DeepSeek's launch of R1 last week, investors' main concerns about the AI hardware space include the potential for lower demand for AI hardware in data centers as a result of the increased AI training and Gen AI; unlikely rapid changes to AI capital expenditure budgets in 2025/26; and the competitive landscape between open-source models and proprietary models, JPMorgan released a research report saying. In addition, JPMorgan estimated the semiconductor industry to remain positive in the medium to long term. While there are concerns about whether the slowdown in AI capital expenditure will reduce and impact demand for semiconductors in the short term, the bank believed it to be the contrary as more efficient model training is likely to lead to a further incline in the need for training, and that the rise of inference models and the development of test-time inference are likely to significantly drive demand for inference hardware. The reduction in inference cost and model size may lead to faster adoption of Edge AI as a key driver of semiconductor demand (more than 70% of semiconductor demand still comes from edge devices) and drive faster proliferation of AI to client devices, which will be a positive driver for semiconductor-related companies such as TSMC (TSM.US), ASE (ASX.US) and SK Hynix. The rise of Edge AI may also benefit MediaTek. AAStocks Financial News |
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