Company Interview / Why Henry thinks AI is becoming a race to the bottom

Key points:

Jennings sees ASX trade as subdued, with oil and Middle East tensions overshadowing sentimentChinese AI models like Moonshot’s Kimi K3 viewed as low‑cost threats to premium US AI economicsCoast Entertainment’s Gold Coast land development seen as unlocking significant embedded valueWeebit Nano (ASX:WBT) viewed as overvalued relative to its slow‑building revenue profile

Henry Jennings from Marcus Today outlines a cautious start to the week on the ASX, characterising trade as dull and directionless despite a modest rise in the index. Jennings points to heightened geopolitical tension in the Middle East and rising oil prices above US$4 a gallon as key overhangs. He notes some stabilisation in Asian markets after last week’s tech sell-off, alongside firmer gold prices, but expects the focus to remain firmly on US earnings season before local results begin in two weeks.

On technology, Jennings highlights emerging Chinese artificial intelligence players such as Moonshot and its Kimi K3 model, viewing them as cheaper, open‑source alternatives to premium US offerings. He draws a parallel with the rapid commoditisation of calculators, suggesting AI compute and tokens may undergo a similar “race to the bottom”, which, in his view, could undermine return on investment after massive capital spend, particularly for high‑end US names.

Turning to individual stocks, Jennings flags Coast Entertainment’s land bank adjacent to Dreamworld as a major driver of value, with plans to build housing and communities on its 55‑hectare Gold Coast site. He also remains wary on Weebit Nano (ASX:WBT), arguing its revenue guidance of US$12–13.5 million sits uncomfortably against a still‑lofty $1.3 billion valuation after a sharp pullback from around $2 billion.