AI Company Valuations Face Pressure From Stalled Spending
Slowing growth and rising compute costs force investors to reconsider the sustainability of current market expectations.
Updated on Oct. 28, 2026 in Artificial Intelligence
Live Poll
Do you believe current high valuations for major AI companies are supported by their actual earnings?
David Wu is questioning the sustainability of Nasdaq AI company valuations, citing slowing revenue growth and stagnant spending. New data reveals that AI token spending stalled in late 2026, challenging the winner-takes-all market assumptions.
Why it matters
The intersection of rising compute costs and cooling demand for AI services threatens the high valuation multiples currently assigned to major tech firms. This shift underscores a growing tension between massive infrastructure investment and actual revenue generation.
Anthropic growth slowed to 45% in Q3 compared to 300% in Q2, while Ramp data shows stagnant token spending. Projections suggest the company would require $1.2 trillion in annual revenue by 2030 to justify valuations previously pegged at the $2 trillion range.
The players
David Wu
Financial analyst assessing valuation assumptions for artificial intelligence companies.
Anthropic
Developer of artificial intelligence models navigating shifting investor growth expectations.
The details
Rising GPU rental rates for H100 chips are driving up operating costs, while power-grid constraints are stalling the physical construction of new data centers. While the US market strategy relies on consolidating the supply chain, China is pursuing a different model by incentivizing a wide array of competing chipmakers and model developers to drive innovation.
Timeline
Worldwide software spending reached $1.22 trillion in 2025.
Anthropic recorded 300% growth in Q2 2026.
AI token spending showed zero growth during August and September 2026.
David Wu analyzed Nasdaq valuations on October 27, 2026.
The Tech Race
The current slowdown in AI token spending marks a significant departure from the growth trajectory established during the 2025 global software spending cycle. While US firms attempt to consolidate the supply chain to maintain dominance, the market is beginning to weigh these investments against concrete revenue realities.
Investors and industry observers should watch for shifts in upcoming quarterly earnings as major AI firms confront rising compute costs. Developers and users may see hardware availability fluctuate as data-center construction faces ongoing power-grid and permitting delays.
The takeaway
The gap between massive AI infrastructure investment and current revenue growth suggests investor expectations for IPOs may continue to moderate. Monitor upcoming quarterly reports from major AI model providers to see if growth stabilizes above the recent 45% quarter-on-quarter figure.
Further reading
For broader trends in industry adoption and capability, visit our Artificial Intelligence section.
Source note: This article includes information reported by TokenPost.
Live Poll
Do you believe current high valuations for major AI companies are supported by their actual earnings?
