AI costs finally high enough to worry Wall Street
▼ Summary
– Google raised its spending estimate to as much as $205 billion, up from the previous quarter’s projection of up to $190 billion.
– The lower end of the new range ($195 billion) exceeds what Google had previously forecast as its top-end spending.
– This spending increase signals to investors that Google cannot accurately forecast its costs.
– Google is currently spending more money than it is making.
It’s earnings season, and Wall Street just got a jolt from Google. The company raised its capital expenditure forecast significantly, now projecting spending of up to $205 billion. That’s a sharp jump from last quarter’s top estimate of $190 billion. Even the lower end of the new range,$195 billion,exceeds what Google previously called its maximum spending level. Now, you might think, “What’s $15 billion among giants?” But for investors, this signals something unsettling: Google is admitting it can’t reliably predict its own costs. That kind of uncertainty rattles confidence. To make matters worse, Google is currently spending more money than it earns, a red flag that’s hard to ignore. And that’s not all. The company’s soaring AI infrastructure outlays are raising broader questions about whether the industry’s massive bets on artificial intelligence are actually paying off. For now, the market is watching closely, and the mood is turning cautious.
(Source: The Verge)
