Opinion · July 2026
A Chinese IPO Just Gave the AI-Capex Skeptics Their Clearest Data Point Yet
I’ve spent the last two Opinion pieces arguing that Friday’s 3.27% semiconductor pullback wasn’t the worst case in my own stress-test, and that the 0.79 correlation between Nebius and CoreWeave wasn’t just an academic exercise. Tuesday gave that argument something it didn’t have before: an actual, dated mechanism instead of a diffuse worry.
A specific competitor, not a vague slowdown
CXMT, a Chinese memory maker, priced an $487 billion IPO that raised $8 billion, and the market’s read, per Motley Fool’s reporting, was straightforward: cheaper Chinese NAND supply threatens the pricing power that turned around both Sandisk’s and Micron’s earnings over the past year. That’s a different, more concrete claim than “AI capex might slow someday” — it’s a specific new competitor with a specific new pile of capital, entering a market that has been pricing in scarcity. Sandisk fell 14.25% on the day and roughly 31% over three sessions; Micron fell 8.85%.
Where this connects to my own research
I don’t think this settles the debate the way the AI Capex Reality Check did — that work was about whether Alphabet and Meta can fund their own buildout from operating cash flow, and CXMT doesn’t touch either company’s balance sheet. But it adds a second, independent way the thesis could go wrong: even if AI infrastructure demand stays exactly as strong as the bulls believe, memory suppliers only capture the margin they do because supply stays constrained. A credible new entrant, at scale, is the first real evidence that constraint might not hold indefinitely.
The same day, ServiceNow and Salesforce both rallied on their own, unrelated news — a reminder that “the AI trade” was never one trade. Software companies selling AI tools to enterprises and hardware companies selling the chips underneath them can, and on Tuesday did, move in opposite directions on the same broad theme.