Addressing the shift underway in the artificial intelligence (AI) trade, William Lee, Chief Economist and Executive Director at the Milken Institute, says that the wave of large capital expenditure in the sector seems to be "fizzling out" as investors reassess the scale of required hardware spending. Markets, he said, are now asking: "Where's the cash flow that's associated with the profits that come out of all this?"

The reaction to Oracle’s stock slide after it announced further capex without a clear return plan, he noted, is emblematic of the changing mood.

Higher interest rates are accelerating this correction. Lee said the rate environment is beginning to separate speculative ventures from viable ones. "As interest rates stay at the relatively high level, it sorts out the cats and d

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