It doesn’t help Google to create an AI-powered business which turns $1B in profit annually if it results in them losing a search/ads business which turns $5B in profit annually.
The CapEx spend for AI not only makes AI itself more expensive (and thus less profitable), it’s now driving everything else in technology to be more expensive (and thus less profitable).
AI is a profitability tax on the entire tech sector and it remains unclear if the profit AI will deliver is going to be worth that.
I would say they should slow down on build-out to balance supplier/labor availability with available cash flows, but I suspect all the Big Tech companies are worried about falling behind the other and being put in the position to need to rent out compute.
It doesn’t help Google to create an AI-powered business which turns $1B in profit annually if it results in them losing a search/ads business which turns $5B in profit annually.
The CapEx spend for AI not only makes AI itself more expensive (and thus less profitable), it’s now driving everything else in technology to be more expensive (and thus less profitable).
AI is a profitability tax on the entire tech sector and it remains unclear if the profit AI will deliver is going to be worth that.
I would say they should slow down on build-out to balance supplier/labor availability with available cash flows, but I suspect all the Big Tech companies are worried about falling behind the other and being put in the position to need to rent out compute.