Observations on AI and the Capital Markets in 2025
In the rapidly evolving landscape of AI and capital markets, insights are emerging on what 2025 may hold. As the head of a product team at Reddit, I’m immersed in AI daily and intrigued by its implications for finance.
Key Insights:
- Inflated CapEx Ratios: Major players like Microsoft and Amazon are spending $320 billion on AI infrastructure, exceeding historical averages.
- Slow P&L Realization: Only 5% of AI pilot programs succeed in practice. Full monetization will take time.
- Valuation Stability: Current tech valuations are lower than past bubbles, aided by stable IPO activity and interest rates.
- Private Credit Surge: Private credit has exploded to $1.7 trillion, changing how AI investments are financed.
The interplay of these factors indicates a potential reallocation in spending and the emergence of unforeseen opportunities.
📢 Join the conversation!
What do you think about AI’s trajectory in the capital markets? Share your thoughts and insights!
