The AI conundrum that every investor needs to know about

It’s been over a year since DeepSeek rocked US tech stocks with its R1 model, wiping $1trn off the Nasdaq. There were concerns that DeepSeek, which was developed at a lower cost to its US rivals, would kill investment in artificial intelligence (AI). This has not been the case, with expected AI capex for 2028 increasing from $250bn to $500bn – and potentially higher. Big AI tech stocks have exceeded expectations, with the Magnificent Seven delivering some of the strongest earnings growth in the market. Despite a strong final quarter of 2025, some tech stocks fell, dispelling concerns of unsustainable...