Tech firms plan to pour trillions of dollars into developing artificial intelligence. Every incremental dollar of new investment carries an even higher value in the stock market.
This investment splurge is unlikely to earn a positive return on capital. But that’s beside the point. Companies and investors are trapped inside the bubble, and for many of them there’s no escape.
The cloud computing giants’ multibillion-dollar data centres come with grandiose names: OpenAI is constructing Stargate, Meta Platforms (META.O) has Prometheus, while Elon Musk’s xAI is building a supercomputer called Colossus. Icarus would appear more fitting.
Big Tech’s business model used to be capital-light and cash flow-heavy. No longer.
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