Here's How the AI Trade Blows Up (Hint: It Has to Do With OpenAI, Anthropic, and China)

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AI Infrastructure: Riskier Than It Looks for Big Tech and Our Rand

Huge AI bets by US hyperscalers could backfire if Chinese open-source models take market share, putting pressure on South African tech exposures and the rand.

The AI boom has sparked over $700 billion in spending by global hyperscalers like Microsoft and Google, deeply tied to OpenAI and Anthropic’s success. But Chinese open-source AI models threaten to erode those firms' pricing power and market share. This could leave hyperscalers sitting on costly, underutilized data centers with poor returns on capital. For the JSE, this maps directly onto shares like Naspers and its offshore vehicle Prosus, both heavily exposed to Big Tech and cloud-related growth stories. If hyped AI spending slows, expect renewed pressure on Prosus, which has been a heavy drag on Naspers share performance. The rand (USD/ZAR) is also at risk, as diminished capital flows from tech sector weakness often spur rand volatility. We watch carefully but remain skeptical about the current euphoria encircling hyperscaler capex. Of course, if Chinese models fail to gain traction or hyperscalers find new demand drivers, this negative cycle may be avoided. this is just our opinion and not financial advice