[New Fire Chief Economist Fu Peng: AI Infrastructure Window Nears End, Application Layer Faces Contraction if It Fails to Take Over] New Fire Group (01611.HK) recently held a monthly private client meeting, where the group's Chief Economist Fu Peng shared his latest insights on the AI industry cycle and digital assets. Fu Peng pointed out that the AI industry is currently in a 'transition period from midstream to downstream'—the infrastructure layer, represented by NVIDIA, has entered a mature stage (characterized as 'old blue-chip stocks'), but the downstream application layer has yet to achieve a milestone breakthrough similar to ChatGPT. He specifically emphasized that a key signal in the second quarter of this year is that the free cash flow of major tech giants is approaching zero. If they continue capital expenditures, they will need to finance at a cost of 6-7%. 'If returns from the application layer are not visible within six months to a year, the growth rate of capital expenditures will inevitably decline, and at that point, the entire upstream chain will come under pressure.'