Veteran investor Jordi Visser says AI’s easy-money phase is ending as heavy spending squeezes Big Tech cash, creating a possible crypto rotation led by Ethereum (ETH) over Bitcoin (BTC).
Key Points:
- Big Tech’s largest AI spenders reported sharply weaker quarterly free cash flow as infrastructure costs climbed across major data center and computing projects.
- Visser expects AI investments to deliver respectable returns, but not the sevenfold or eightfold gains that attracted investors during the sector’s earlier phase.
- Crypto could benefit, but regulation and rates remain serious constraints.
Visser AI Warning
Alphabet reported negative free cash flow of $5.9 billion for the April-to-June quarter, compared with positive $5.3 billion a year earlier, after capital spending exceeded operating cash generation. That had never happened before.
Meta kept only $784 million in free cash flow, down from $8.5 billion, while quarterly capital expenditures reached $31.08 billion and revenue increased 28%. Legal expenses and severance payments accounted for $3.58 billion of costs, so the decline did not come from AI investment alone.
The squeeze was broad. Microsoft remained the strongest cash generator, reporting $19.6 billion in free cash flow and 43% Azure growth, but its cash cushion still fell 23% from the previous year. “The AI trade’s over. The ability of getting seven, eight times your money in that is over,” Visser said on a podcast.
Also Read: OpenAI Says July Revenue Alone Outran Its Entire Second Quarter
Bitcoin Ethereum Rotation
The distinction matters. Visser does not argue that AI growth has ended. He expects annual returns closer to 30% as cheaper open models narrow competitive advantages and reduce the odds that one company maintains a lasting lead.
He said autonomous AI systems will need blockchain-based payment rails, but he favors Ethereum because its network produces fee revenue. Bitcoin remains part of the rotation thesis, while passage of the CLARITY Act could determine how quickly institutional investors increase exposure.
The macro backdrop remains restrictive. The Federal Reserve held rates at 3.5% to 3.75% in a 9-3 vote, while the Dow fell 1,153 points and longer-term Treasury yields rose after the decision.
Goldman Sachs said “there are limited sources of ‘juice’ for rallies in the immediate term,” citing heavy hedge-fund leverage and weaker retail trading.
Bitcoin has recovered from its late-June lows, but it remains roughly 49% below its October 2025 record, showing that a crypto rotation is still a thesis rather than a confirmed cycle.
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