The artificial intelligence trade has been “dead money” for more than three months, Director of Global Macro at Fidelity Investments, Jurrien Timmer, said Tuesday, even as hyperscalers keep pouring hundreds of billions into the technology’s buildout.

‘The Price of Memory Seems to Be the Only Thing Still Going Up’

“On the AI front, the trade has been dead money for more than 3 months now,” Timmer said in a post on X, adding that token expenditures and GPU lease rates are “all flat to down.”

Meanwhile, the price of memory seems to be the only thing that is still going up, he added.

Fidelity data show the Silicon Data LLM token expenditure index down 49% on a 50-day basis, while GPU rental rates for both H100 and A100 chips have cooled sharply after peaking earlier this year at gains of 56% and 16%, respectively.

A global memory chip shortage has pushed up costs across the AI buildout, a crunch expected to persist until 2028.

A $3.3 Trillion Capital Grab With No Guaranteed Return

Timmer said the buildout “is inflationary with an unknown return for the companies who are investing trillions into compute,” adding that corporate demand for capital, both debt and equity, is climbing at “a $3.3 trillion clip.”

U.S. hyperscalers are on pace to spend roughly $916 billion on capital expenditures over the next 12 months, with combined capex from Alphabet Inc. (NASDAQ:GOOG)(NASDAQ:GOOGL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corp. (NASDAQ:MSFT), Meta Platforms Inc. (NASDAQ:META), Oracle Corp. (NYSE:ORCL), and Space Exploration Technologies Inc. (NASDAQ:SPCX) expected to exceed $1 trillion in 2027.

‘Down the Road, It May Well Unleash a Productivity Miracle’

Despite the near-term stall, Timmer said he still believes AI “will change our lives” and could eventually “unleash a productivity miracle that raises the economy’s non-inflationary speed limit.”

Ark Invest’s Cathie Wood believes the AI revolution could ultimately dwarf the Industrial Revolution’s economic impact, projecting real GDP growth could hit 7% or more within five years.

Price Action: The Invesco QQQ Trust (NASDAQ:QQQ) closed 0.93% higher on Tuesday at $$747.46 and rose 0.12% in extended trading, while the iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ:SOXX) gained 2.56% to close at $572.78 and rose 0.15% in after-hours.

Benzinga edge rankings indicate Invesco QQQ Trust has a Momentum score in the 78th percentile and a positive price trend in the short, medium, and long term.

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