Gizmodo (June 8)
AI mania “is running up against some hard economic realities. In recent weeks, big tech companies have been forced to admit that spending on tokens—the basic unit of measurement for AI usage—has gotten out of control.” As companies grow more cost conscious, big tech is waking up to the need “to find a new way to sell people on the future of AI without the exorbitant token costs. If they don’t, companies and users will just switch to some open model they can use for free.”
Tags: Admit, AI, Big tech, Companies, Cost conscious, Economic realities, Exorbitant, Free, Future, Mania, Open model, Spending, Switch, Tokens, Usage
Barron’s (February 25)
“Putting aside the whipsaw effect of recent tariff moves, the biggest problem plaguing the market in recent weeks is artificial intelligence. Investors are afraid it’s going to replace businesses wholesale, and empty big tech’s deep pockets to do it.”
Tags: Afraid, Artificial intelligence. Investors, Big tech, Deep pockets, Effect, Markes, Plaguing, Problem, Replace, Tariffs, Whipsaw
New York Times (February 12)
“European leaders have stepped up their push to reduce reliance on big American tech firms like Amazon, Google and Microsoft for cloud computing, and on financial services titans like Mastercard and Visa for payment systems. The move to secure what are being labeled monetary sovereignty and digital sovereignty is part of a broader effort to reduce Europe’s dependence on American weapons, trade, technology and more.”
Tags: Amazon, Big tech, Cloud computing, Dependence, Digital sovereignty, Europe, Financial services, Google, Mastercard, Microsoft, Monetary sovereignty, Payment systems, Reliance, Technology, Trade, U.S., Visa, Weapons
New York Times (November 18)
UBS expects “the global A.I. capex tally” will “hit $423 billion this year…and reach $1.3 trillion by 2030.” But Big Tech’s “debt-fueled spending spree” is raising concern. “Not long ago, huge investment pledges pushed the A.I. rally to new heights. But the need to borrow so many billions is beginning to rattle stock and bond investors.” For example, “shares in Oracle, and some of if its bonds, have sold off sharply in the past month in a sign of investors’ growing concerns about its long-term A.I. financing plan.”
Tags: $1.3 trillion, $423 billion, 2030, A.I., Big tech, Bond, Borrow, CAPEX, Debt-fueled, Financing, Investors, Oracle, Shares, Spending spree, Stock, UBS
Market Watch (November 13)
“Artificial intelligence has snowballed from a technological innovation to the growth driver of the entire economy and a national-security interest. Could it be on track to become too big to fail, leaving the U.S. government to hold the bag?” At the moment, there is no doubt that “Big Tech is betting everything on AI,” but there is less recognition that this gamble “could leave the U.S. government on the hook.”
Tags: AI, Big tech, Economy, Government, Growth driver, National security, Snowballed, Technological innovation, Too big to fail, U.S.
Wall Street Journal (October 25)
“Big Tech stocks are extremely expensive but have been for years. If OpenAI quickly comes up with a vital service everyone proves willing to pay big bucks to use, maybe even its price can be justified. After all, the only absolute proof of a bubble comes when it bursts.”
Tags: Big tech, Bubble, Bursts, Expensive, Justified, OpenAI, Pay, Price, Proof, Stocks, Vital service
Washington Post (January 20)
“Big Tech’s power surge” was on clear display at Donald Trump’s inauguration. The event was also “an inauguration of the oligarchs, the billionaires’ ball come to Washington. Donald Trump did everything but invite the tech moguls to join him in taking the oath.” In a “revealing” scene, the moguls had “prime dais seating inside the cozy Rotunda while lawmakers and governors and other luminaries were relegated to watching on screens.”
Tags: Big tech, Billionaires, Governors, Inauguration, Lawmakers, Luminaries, Moguls, Oath, Oligarchs, Power surge, Relegated, Rotunda, Trump, Washington
Wall Street Journal (April 17)
Marking “a sharp reversal” from years of “bolstering their office footprints,” Big Tech is now “downsizing workspace in another blow to office real estate.” Especially hard hit, “San Francisco’s office-vacancy rate hit a record 36.7% in the first quarter,” roughly ten times worse than early 2019 when it stood at 3.6%.
Tags: 2019, 3.6%, 36.7%, Big tech, Downsizing, Footprints, Office, Real estate, Record, Reversal, San Francisco, Vacancy, Workspace
Institutional Investor (August 29)
“Ever since ChatGPT burst onto the scene last November…so-called “generative AI” has turned the markets on their heads.” Venture capitalists, “coming off the worst year in recent history,” have “redirected their dollars to AI upstarts. Meanwhile, the stock prices of the big tech names suspected to be the major beneficiaries of this often-called ‘revolutionary’ form of artificial intelligence have skyrocketed.” In 2023, “generative AI and machine learning start-ups raised about $39.4 billion.” The massive inflows are creating an ideal environment for fraudsters and critics “are starting to wonder whether the latest technology is really transformational or merely evolutionary.”
Tags: Big tech, ChatGPT, Critics, Evolutionary, Fraudsters, Generative AI, Machine learning, Markets, Revolutionary, Skyrocketed, Start-ups, Stock prices, Technology, Transformational, VC
Economic Times (January 23)
Big Tech’s “planned rightsizing is… unlikely to make up for the deep correction in 2022 of technology companies’ stock prices. Earnings estimates for the last quarter of 2022 are grim and Big Tech may have to go in for more job cuts to keep market capitalisation aloft. This could be a theme for the industry in 2023.”
Tags: 2022, 2023, Big tech, Deep correction, Earnings, Estimates, Grim, Job cuts, Market-cap, Rightsizing, Stock prices, Technology, Unlikely
