Forrester: falling stock markets do not change the trajectory of AI, but investment tends to change direction

The founder, president and CEO of Forrester Research, George Colony, said in an interview with Bloomberg Television that the sharp sell-off on global stock markets does not change the long-term trajectory of artificial intelligence, but should provoke a redistribution of capital invested in the sector. At the time of the conversation, according to the presenter, the S&P 500 fell 3.1% and the Nasdaq fell more than 5%.

Colony asked investors to remain calm. According to him, Forrester projects that global technology spending will reach US$6.1 trillion next year, an increase of around 8%, and that AI will account for 30% of all technology spending by 2030. "Technology spending is not slowing down, it is increasing," he said. He called AI the most important technology invented in his lifetime.

Data centers change address

Asked about the possible slowdown in the construction of data centers after the elections, especially in Texas, where the presenter cited the change in the mood of the local electorate, Colony predicted a "migration of capital". In his assessment, data centers will continue to be built, but in other states. He said he doesn't expect new work in Texas, and probably not in Ohio and Georgia either.

The executive also pointed out a factor that is still little considered by the market: private models, developed by banks, insurance companies and car manufacturers. According to Forrester, 70% of revenue generated from AI will come from these models, and not from large frontier models such as Gemini and Anthropic. For Colony, there is currently a poor allocation of capital in favor of public models.

This, he said, should take part of the computers back to the companies' own data centers, such as JPMorgan or Bank of America, and alleviate the pressure on the construction of hyperscalers' structures. He admitted there may be some moderation in demand for data centers as older cloud systems are converted to so-called AI computing.

Nvidia, neoclouds and the role of software

Colony said that large companies don't like to be held hostage by a single supplier and that this is happening today with Nvidia. He cited chips developed by AWS and Microsoft and estimated that other processors will occupy data centers. It doesn't mean a collapse for Nvidia, he said, but the company's growth may be less optimistic than one imagines. According to the presenter, the company will release results on November 17th.

The presenter also cited a report from Bloomberg itself, signed by Brody Ford, according to which Microsoft was losing its appetite for so-called neoclouds, due to delays, regulatory obstacles and high costs. Colony saw in the report another sign of "cracks in the structure", but ruled out the risk of contagion: "the columns are not falling yet". For him, the advancement of AI will not be in a straight line.

Regarding the cost of capital, Colony said that the sector received excess money and that the correction should force smaller, distilled models, in the range of billions of parameters, not trillions. According to him, some Chinese models already follow this trend. In the historical comparison, he recalled that Cisco was the company with the highest market value in building the web. Today this position belongs to Nvidia, which, in his view, is not sustainable at these levels, and the value tends to migrate to the software.

The software sector itself, however, faces high risk. Colony estimated the chance that a company in the segment would not survive the transition to AI computing at 50%, and said that the challenge is to move from structured and deterministic data to unstructured and probabilistic data. Regarding OpenAI and Anthropic, he stated that a language model is not a business model, but that the two could become the Oracle and SAP of the future, supporting the private models of large companies.

For investors, the message of the interview is that Forrester's analysis points to a more selective market, with less concentration on chip manufacturers. Colony reinforced that it looks at a five-year horizon, not hours, and that AI will be embedded in all devices.

Automatically translated from Portuguese.