Shutdown? What Shutdown?

AI megadeals meet recessionary signals from the ISM jobs data and Fed diffusion index, while shutdown worries recede.

Key Takeaways

• AI Blockbuster Deals Chase Moats, Not Free Cash Flows: We are seeing a surge of massive corporate deals aimed at securing a strategic foothold in the AI industry’s future. This is typical in periods of investment euphoria around disruptive technologies. These moves are driven not by fundamentals or realistic growth projections, but predominantly by the desire to pre-empt future competitors in newly forming markets. This wave of blockbuster spending is hardly a reason to expect strong long-term returns — if anything, it argues the opposite.