Xie Jinhe, chairman of Caixun Media, pointed out that the AI craze has triggered an arms race, brought huge capital expenditures, and also caused an overall increase in AI supply chain prices. (File photo)
[Instant News/Comprehensive Report] Xie Jinhe, chairman of Caixun Media, pointed out that the AI craze has triggered an arms race, brought huge capital expenditures, and also caused an overall increase in AI supply chain prices. He bluntly said that large companies are currently grabbing money in the market, public bond yields are getting higher and higher, and the cost of information funds is also rising. This is AI-driven inflation. Xie Jinhe believes that the era of low interest rates is over, and the central bank's decision-making will also face greater challenges. However, the fundamentals of Taiwan's stocks are very good. Although there is insufficient funds, stock prices can still hit new highs, and the gains are concentrated in a few stocks.
Xie Jinhe posted an article on Facebook with the title "Money is tight! AI inflation is coming!" and pointed out that following the album produced by Today Weekly: Borrowing money becomes difficult! A week later, Business Weekly also followed up and made another one: Cheap funds see you again! cover story. Both publications are discussing the same thing: rising interest rates and the reality that money is becoming increasingly scarce.
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Xie Jinhe said that despite Trump's constant pressure on the Federal Reserve to cut interest rates and believed that the interest rate should be reduced to 1%, the market did not give Trump face. Even Washer, whom he appointed to replace Powell, made a 12:0 one-sided decision at the FOMC interest rate meeting, raising the basic interest rate to 3.75 to 4%, and the U.S. long-term mortgage interest rate even reached 7.45%. Instead of cutting interest rates, the Federal Reserve raised interest rates.
Xie Jinhe pointed out that in the past two days, the U.S. 10-year bond yield has risen to 5.208%, and the 30-year bond yield has risen to 5.476%. This phenomenon of soaring bond yields is not entirely driven by rising oil prices, but driven by the capital expenditure of AI. This is "AI inflation."
Xie Jinhe mentioned that the IMF has just announced that global investment in AI this year has exceeded US$2 trillion. This year alone, the price of HBM and SSD has increased by at least 3 to 10 times. Last time he listed the cost of a Vera Rubin cabinet at US$7.8 million, and the memory alone accounted for US$2 million. The AI arms race has brought huge capital expenditures and also caused an overall increase in AI supply chain prices.
Xie Jinhe analyzed that the capital expenditures of the four major CSP companies in the United States this year are US$745 billion, and they have issued US$250 billion in bonds this year. Large companies are rushing to grab money in the market, public bond yields are getting higher and higher, and the cost of information funds is also rising. This is AI-driven inflation.
Xie Jinhe bluntly said that Taiwan is no exception. Major technology companies have expanded their factories this year. Whether it is increasing capital from the stock market or borrowing from banks, everyone is working hard to raise funds, further causing a shortage of funds in the banking system. There is an indicator that has weakened recently, which is not very beneficial to the stock market, that is, M1b and M2 have formed a death cross, which is also a sign of tight funds.
Xie Jinhe emphasized that the inflation caused by AI will next test the response of the Taiwan Central Bank. For so many years, Taiwan has maintained ultra-low interest rates, and many small and medium-sized enterprises have enjoyed the benefits of low-interest financing. Or disadvantaged self-employed people can also enjoy low-interest financing discounts. But the era of low interest rates is over, and central bank decision-making will also face greater challenges! I wonder if President Yang Jinlong is ready? no?
Xie Jinhe pointed out that, however, the fundamentals of the Taiwan stock market are very good, but the funds are not enough, the stock price can still reach new highs. This is a partial breakthrough, and the rise is concentrated in a few stocks. For example, previously it was Chuanhu, Jiance, and Largan. This time it is MediaTek and Creative. This is a single point breakthrough!
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