Maybank Investment Bank opined that artificial intelligence (AI) remains positive amid struggling Thai electronics (ETRON) sector.
The research house said in a note on Tuesday that AI spending continues to increase despite recent news surrounding Deepseek and its relatively lowcost models.
This was despite that in terms of Thai ETRONs, the outlook for the sector remains poor from the struggling Western electric vehicle sector and overall soft demand outlook caused by geopolitical uncertainties, according to Maybank.
Despite concerns regarding Deepseek’s impact on AI spending, major hyper scalers like Microsoft, Meta, Amazon, and Google have only promised to accelerate their AI spending and capabilities, it highlighted that up to $300 billion/$400 billion in capital expenditure (CAPEX) for FY25/FY26 combined versus the $230 billion spent in FY24.
Cited Wedbush, it estimated that global spending on AI could reach $3 trillion in total within the next three years.
In fact, Wedbush argued that the advent of Deepseek is a boon for the AI market as it reduces the barriers to entry for companies looking to incorporate AI – only around 5 percent of American enterprises are currently using AI, suggesting that the trend is still only in its infant stages.
In the long-run, new applications and monetization methods will allow even greater spending capacity from AI players.
Wedbush, however, believes that concerns on rising geopolitical tensions are unwarranted and that the Trump administration’s threats are mostly used as a bargaining tool for better trade deals, which may take place in late FY25 or in FY26.
“Their talks with sources in Washington indicate that no major trade barriers or disputes are likely to take place in the long-run,” said Maybank.