AI Spending at Crossroads: Niles on US Economy and Altman's Warning

Dan Niles, a finance expert and founder of Niles Investment Management, believes the US is at a crossroads. He also discusses the potential risks of an AI bubble, citing a MIT study that found 95% of enterprises investing in AI saw no return on investment. With the surge in AI spending, investors now demand results, according to Niles.

Title: AI Innovations and Earnings Highlights: Microsoft and Cloud-Based Software Companies

Microsoft has unveiled two new AI models, MAI-Voice-1 and MAI-1-preview, as part of its ongoing mission to create AI that empowers everyone globally [1]. MAI-Voice-1, a speech generation model, can create a full minute of audio in under a second on a single GPU. This model is already powering features in Copilot Daily and Podcasts and is now available in Copilot Labs for testing expressive speech and storytelling capabilities. The company also began public testing of MAI-1-preview on LMArena, a platform for community model evaluation. This foundation model was trained end-to-end on approximately 15,000 NVIDIA H100 GPUs and is designed to follow instructions and provide helpful responses to everyday queries. Microsoft plans to implement MAI-1-preview for certain text use cases within Copilot over the coming weeks to gather user feedback. The model is also being made available to trusted testers who can apply for API access.

In the realm of AI-powered cloud platforms, MongoDB Inc. (MDB) and Snowflake Inc. (SNOW) reported strong second-quarter fiscal 2026 earnings, with stock prices surging following the announcements. MongoDB reported quarterly revenues of $591.4 million, beating the Zacks Consensus Estimate of $551.1 million, and quarterly adjusted earnings per share of $1, surpassing the Zacks Consensus Estimate of $0.64 [2]. Snowflake reported quarterly revenues of $1.14 billion, exceeding the Zacks Consensus Estimate of $1.09 billion, and quarterly adjusted earnings per share of $0.35, surpassing the Zacks Consensus Estimate of $0.26.

Both companies are positioned to benefit from accelerating demand for cloud-based software. MongoDB has scaled its Atlas platform beyond database management into analytics, emphasizing developer-friendly interfaces and distributed architectures. Snowflake’s AI Data Cloud unifies structured and unstructured data with governance, while Snowpark and Dynamic Tables expand developer use cases and enable real-time analytics. These capabilities are expected to drive adoption across industries as enterprises transition from legacy infrastructure to scalable platforms.

However, Dan Niles, a finance expert and founder of Niles Investment Management, cautions about the potential risks of an AI bubble. According to Niles, 95% of enterprises investing in AI saw no return on investment, as cited in a MIT study. With the surge in AI spending, investors are now demanding results. This highlights the need for companies to deliver tangible value and ROI from their AI investments.

References:
[1] https://www.investing.com/news/stock-market-news/microsoft-ai-unveils-maivoice1-and-mai1preview-models-93CH-4215309
[2] https://www.tradingview.com/news/zacks:13760dc3a094b:0-2-ai-powered-cloud-platform-stocks-in-focus-after-solid-q2-earnings/