End of High Margins? Profitability Could Be the AI Bubble's Breaking Point
JOBhakdi · x · 2026-07-23
Addressing the phenomenon of AI companies currently enjoying extreme margins of 80%-90%, industry observers have issued a warning. JOBhakdi points out that margins are a function of demand and bottlenecks.
As more technologies, chips, and companies enter the market to compete for these profits, the abnormally high margins of these companies may rapidly fall back to a normal level of 25%. Once margins drop significantly, the current industry valuation bubble could burst accordingly.
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