AI risk remains elevated as China’s domestic stack advances while returns and power constraints remain unresolved.

The underlying risk picture is broadly unchanged. Strong cloud demand and constrained capacity continue to support the build-out, while heavy spending, weaker free-cash-flow conversion and power-permitting friction keep returns exposed. China’s DeepSeek-Huawei software work remains a competitive development, but no material China-driven change was reported since the prior briefing.

• Hyperscaler cloud demand remains robust, but Amazon and Alphabet both paired strong cloud results with sharply higher capital plans and weaker free cash flow.
• Project Jupiter keeps power availability, contractual risk allocation and project-finance timing in focus; Oracle and Blue Owl say commitments remain intact, but the force-majeure notice tests whether capacity can convert into revenue on schedule.
• Enterprise deployment remains uneven: Gartner found only 22% of surveyed organizations had scaled AI across multiple business units, despite continued planned spending.
• China is reducing friction in its domestic AI stack through DeepSeek-Huawei tools and Ascend ecosystem development; if adoption follows, capable lower-cost alternatives could pressure model and cloud economics outside China.

• AWS reported 37% year-on-year revenue growth, a $496 billion backlog and continuing capacity shortages, supporting the view that a meaningful portion of infrastructure demand is contracted rather than speculative.
• BEA research finds evidence consistent with AI use being associated with stronger output and productivity, although it does not establish causality.
• China’s domestic-chip progress is not yet proof of global displacement: Huawei’s performance and ecosystem claims are company statements, and developers still face switching and interoperability costs.
• Western open-weight releases are narrowing China’s recent lead, preserving alternatives for customers unwilling or unable to use Chinese model ecosystems.

• Whether Project Jupiter’s power delay changes rent, lender protections, construction milestones or funding terms.
• Whether hyperscaler backlogs convert into recognized cloud revenue and free cash flow rather than further contracted capacity.
• Evidence of enterprise AI scaling, pricing power and measured productivity gains beyond surveys and early correlations.
• Developer adoption and commercial deployment of DeepSeek-Huawei Ascend tools outside announced partnerships.