It requires them to bet that:

1. This AI-driven demand cycle is a temporary blip

2. None of their competitors will make massive investments in capacity.

3. No state actors will do so despite evidence to the contrary.

Many in silicon have gone out of business due to the boom-bust cycles so being a bit conservative is appropriate but at some point not expanding production becomes an existential crisis.

Or ya know enough governments with the power get really angry and start forcing price controls, nationalizing, using their state spy agencies to steal your secrets, or use unofficial back channels to make your life extremely difficult.