The artificial intelligence investment story is entering a new chapter, according to Alicia Garcia Herrero, Chief Economist for Asia Pacific and the Middle East at Natixis Corporate and Investment Bank.

While the AI revolution continues to create significant opportunities, investors may need to adjust their expectations. The first phase of the AI boom was driven by enthusiasm surrounding generative AI (GenAI), with companies such as OpenAI, Anthropic, Nvidia, and major hyperscalers attracting massive investor interest. However, increasing competition and falling prices are beginning to pressure profitability across the sector.

According to Herrero, the market is starting to recognize that generative AI may not become as profitable as many investors initially expected. Companies are already lowering prices to remain competitive. OpenAI has reduced pricing on several services, while the emergence of low-cost competitors such as DeepSeek has intensified competition across the industry.

As a result, investors are reassessing valuations of companies whose future growth was heavily tied to high-margin AI services. The recent weakness in some AI-related stocks reflects this shift in sentiment as markets adjust to a more competitive environment.

Despite these concerns, Herrero remains optimistic about the broader AI revolution. She believes the next phase of growth will extend beyond traditional generative AI applications and into new sectors such as satellites, space technologies, advanced memory solutions, and next-generation data center infrastructure.

These industries are expected to benefit from the increasing computational demands of AI systems. As AI adoption expands across businesses and governments, demand for computing power, data storage, networking equipment, and supporting infrastructure is likely to remain strong.

Herrero also highlighted memory technology as a particularly attractive area. While some investors have become cautious about the semiconductor sector, she argues that advanced memory remains a critical component of AI development with few viable substitutes.

Another major trend is the expansion of AI into space-related technologies. Satellites, space-based communications, and specialized data centers could become important parts of the AI ecosystem as the technology evolves and requires greater processing capacity and global connectivity.

At the same time, competition among AI model developers continues to intensify. Companies may increasingly train models using premium platforms such as Anthropic while deploying them on lower-cost systems powered by open-weight models like DeepSeek. This trend could further compress margins for AI developers while expanding adoption among businesses seeking lower costs.

For investors, the key challenge will be identifying companies that benefit from the broader expansion of AI rather than relying solely on the profitability of generative AI platforms. Opportunities may increasingly be found in the infrastructure supporting AI rather than in the AI models themselves.

While the current correction in AI-related stocks reflects growing concerns about profitability, Herrero believes the long-term growth story remains intact. The AI revolution is not ending—it is simply evolving into a broader ecosystem that includes computing infrastructure, memory technology, satellites, and space-related innovations.

As the market enters this new phase, investors who can identify the next generation of AI beneficiaries may find significant opportunities ahead.