Gartner analyst behind tech rout: AI returns are not yet large enough to justify neocloud build-out

Wall Street research and advisory firm Gartner is standing by its forecast that $3.5 trillion in AI investment could be on the rocks due to profitability concerns among the top AI models. Gartner's forecast, issued last week, helped send shockwaves through the AI trade. The firm's chief forecaster, John Lovelock, told CNBC Monday that returns are not yet backing up the full scale of investment. Consolidation and takeovers among AI-dedicated companies known as neoclouds could ensue, due partly to a mismatch in timing, he added. "At the moment, we have more compute capacity than we have demand, and we have a lot of the tokens and processing power being given away in freemium solutions," he told CNBC.