The business of AI's 4 harsh realities

Investors were confronted with four difficult realities that may fundamentally change the way they think about AI the business vs. AI the technology:

1. AI is too expensive, say CEOs and even Microsoft itself.
2. It's not paying off nearly as much as companies expected, per a new Bain study.
3. Infrastructure demand is strong—but not as strong as the most optimistic wanted, as Broadcom showed with its "weak" forecast.
4. Financing that infrastructure is going to be more expensive for longer, with signs pointing to the Fed raising, not lowering, interest rates.

Those realities challenge assumptions that powered markets to historic heights over the past few years. It's hard to justify chip or memory stocks rising 1,000%+ in a year if the boom isn't what everyone assumed. The costs of AI are now. The profits are later—maybe.