AI SPENDING SURGE JUSTIFIED BY CLOUD DEMAND

According to Lazard Asset Management Portfolio Manager Celine Woo, major tech companies remain justified in ramping up spending on artificial intelligence capabilities. The earnings reports from Microsoft and Amazon reveal a persistent gap between demand for cloud infrastructure and available supply. This supply constraint supports the case for continued heavy investment from hyperscalers as they build out capacity. The AI market is entering a new growth phase, with the focus shifting from training large language models to inference—the process of running trained models to generate outputs. This transition is expected to drive the next wave of growth and infrastructure requirements. Hyperscalers' aggressive capital expenditure on AI infrastructure aligns with this trajectory. As demand for inference capabilities grows alongside continued training requirements, the infrastructure gap suggests investment levels remain appropriate for capturing market opportunity.