The "fake it till you make it" approach in artificial intelligence is facing growing skepticism from investors.

Despite NVIDIA's latest earnings beating market expectations, its stock closed lower on the reporting day, experiencing its biggest intraday swing since April. Additionally, the market reacted tepidly to NVIDIA and Microsoft's November 18 announcement of a $15 billion investment in Anthropic, which pledged to purchase $30 billion in computing power from Microsoft. Such circular investment news would typically drive stock prices higher in the past.

Market sentiment has clearly shifted—from the previous belief that AI investments would inevitably yield returns to a more cautious stance. Investors are losing interest in long-term strategies that involve heavy upfront spending for future gains, instead favoring AI business models that can deliver near-term profitability. This trend is putting new pressure on AI companies reliant on long-term visions and infrastructure providers like data centers.

**Reassessing the "Burn Cash for Growth" Model** The core issue for AI service providers is that the cost of delivering services exceeds what customers are willing to pay, leading to greater losses as customer numbers grow.

These companies have relied on shareholder subsidies to fuel user growth, creating a cycle where expanding user bases attract investor funding, boost valuations, and allow firms to hire engineers (often compensated with equity), subsidize more customers, and invest heavily in infrastructure—all in hopes of eventually developing premium products that can command full prices.

However, investors are increasingly recognizing the fragility of this model and are unwilling to continue funding massive expenditures for highly uncertain returns. The recent broad decline in AI infrastructure stocks reflects this reassessment of the "burn cash for growth" logic.

**Investors Shift to Short-Term Profit Strategies** While the market is moving from "guaranteed returns" to cautious evaluation, it is far from rejecting AI entirely. NVIDIA's stock is still up over 30% year-to-date, Microsoft has gained 14%, and CoreWeave—which expanded from crypto to cloud services since its March IPO—has surged nearly 80%.

The investment thesis for AI is undergoing a profound shift, with market focus pivoting from long-term visions to short-term monetization. Investors are no longer blindly chasing distant "superintelligence" narratives but instead prioritizing companies that can demonstrate tangible profitability and commercialization in the near term. This explains why Alphabet has remained resilient amid recent market volatility—its focus on translating existing technology into real value for enterprise clients showcases a clear monetization path.

The market is clearly moving away from hype-driven speculation, demanding companies present concrete paths to profitability. This shift pressures firms dependent on long-term narratives, such as Meta Platforms and OpenAI, as well as related data center suppliers. For now, however, this appears to be a rational recalibration of investment logic rather than a bursting of the AI bubble.