AI Weekly Observations: Hardware Momentum Continues, Financing Pressure Persists

This week, momentum in the AI industry continued to spread toward storage, computing power infrastructure, and optical interconnection, yet capital intensity and financing constraints rose in tandem. Domestically, storage manufacturing, computing power chips, and cloud storage advanced production and product iteration in parallel, with computing power chip coverage extending from the cloud side toward the edge and device side. Optical communication companies directed private placement proceeds into advanced packaging and optical interconnection, capital expenditure unfolded simultaneously across multiple links of the industrial chain, and revenue scale on the model side climbed rapidly. Overseas, the model side continued to compete for usage through faster speeds and lower prices, but cost pressure is now transmitting across the entire industrial chain, and upstream wafer price increases may drive chip prices higher; on the financing side, the listing arrangements of leading model companies have been delayed, OpenAI is expected to face a massive free cash flow gap over the next five years, and major investors continue to raise funds through high-yield bonds. Overall, AI demand and infrastructure investment have not yet cooled, but the computing power race is shifting further from a contest of technological capability to a comprehensive competition of supply chains, cash flow, and financing capacity.

High-frequency data show that this week model-side usage fell back from highs, the spending index maintained low-level fluctuations; the hardware side shifted from overall high-level sideways movement toward divergence between old and new products; and the financing side shifted from previous stock-bond strength to strong equities and weak bonds. OpenRouter weekly Token usage declined after consecutive record highs, most model vendors saw usage drop, and a clear increase at a single vendor only partially offset a sharp decline at another leading vendor, indicating that model-side demand growth is beginning to cool; the large language model Token spending index briefly rebounded early in the week before weakening again, with neither usage nor spending sustaining last week's improvement. On the hardware side, mature GPU rental prices edged lower while next-generation GPU rental prices continued to rise, concentrating computing power demand further toward advanced products; storage price divergence deepened, with DDR5 extending gains while DDR4 edged down. On the financing side, the stock price index of the five major cloud providers recovered somewhat, but bond credit spreads widened again, meaning improved risk appetite in the equity market was not confirmed by the credit market, and credit stratification among cloud providers deepened further. Overall, this week the demand side shifted from expansion to marginal cooling, yet advanced GPU and DDR5 prices remained firm, reflecting that AI momentum has not weakened across the board but that demand and capital continue to concentrate in next-generation hardware; the renewed widening of credit spreads indicates that capital expenditure and financing constraints have not yet eased.

Over the past week, AI sectors in China and the US continued to rise in the same direction, but US stocks concentrated their strength upstream in semiconductors, while A-shares were led by domestic computing power chips. US gains were concentrated in computing power chips, semiconductor equipment, and storage manufacturing, with the semiconductor index strengthening notably, equipment leading the advance, and the storage chain recovering in tandem; server systems and hardware networking diverged, internal strength differences among cloud providers and AI applications widened further, and power infrastructure was basically flat. A-shares rose modestly overall, with strength mainly concentrated in domestic computing power chips, and the semiconductor index and AI index strengthening together; semiconductor equipment and materials pulled back somewhat, optical modules and PCBs diverged internally, server computing power and AI applications remained largely sideways, and liquid cooling weakened markedly. Overall, US pricing spread toward chips, equipment, and storage, showing broad improvement in upstream hardware; A-share capital concentrated on domestic computing power chips while other links of the industrial chain performed poorly. Although China and the US moved in the same direction, US diffusion was more complete, while A-shares remained dominated by localized rotation.

Risk Warning: Market performance may fall short of expectations, risk pricing may be insufficient, industry development may fall short of expectations, and model setup risks.

Orient Securities Company Limited (600958)