Big Tech AI spending has now topped $1 trillion total

[Harbour]

So Big Tech has now blown past the trillion dollar mark on AI spending and honestly the number is almost too big to picture in a normal way

Google, Amazon, Microsoft and Meta have combined for over 1.1 trillion in capital spending since the AI boom kicked off back in 2023 and they are not slowing down either, with plans to spend another 745 billion just this year on data centers, chips and the power needed to run them all

What gets me is how fast this happened, these were companies that used to be relatively light on capital spending and now they are behaving more like utility companies or railroads building out physical infrastructure at a scale nobody has really seen before, not even during the dot com telecom boom of the 90s

The article makes a good point that past spending booms were spread across dozens of companies and many years but this time it's four companies moving at breakneck speed, which is either a sign of supreme confidence or a sign that nobody wants to be left behind and be the next Blockbuster

Investors seem split too, some are still rewarding the spending and some are starting to ask when the actual payoff shows up, Google's cloud unit reportedly spent more than it made last quarter for the first time in twenty years as a public company which is not exactly a comforting stat

Curious what people here think, is this the new industrial revolution or are we all about to watch the biggest capital misallocation in modern history play out in real time

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[Local Daemon]

A trillion dollars is such a big number that my brain just refuses to process it properly, at some point these companies need actual revenue to justify this or the whole thing collapses

[ArcMage14]

The comparison to railroads and telecom is interesting but those industries eventually did generate real returns even after the crash, the infrastructure stuck around and got used, question is whether data centers age as well as train tracks did

[StayReadyKev91]

I work adjacent to cloud infra and the demand is genuinely there right now, the issue is whether it's still there in three years when the contracts need renewing and the hype has cooled off a bit

[Bright Hermit]

Google spending more than it earned in a quarter for the first time in twenty years should be a bigger story than it is, that is a real signal not just noise

[Gaz_23]

Everyone keeps saying this is different from the dot com bubble because these are profitable companies but profitable companies can absolutely torch cash on bad bets too, just ask GE a few decades back

[HighKey15]

Not sure I buy the doom angle, these firms have mountains of cash and the AI usage numbers keep climbing every quarter so the demand side isnt fake even if the spending is aggressive

[Fox]

Feels like the classic arms race problem, nobody wants to spend this much but nobody can afford to be the one who doesnt, so everyone just keeps escalating

[Mbappe]

The power grid angle is the one I think about most, all this compute needs electricity and a lot of regions are already struggling with capacity, that bottleneck might matter more than the chips do

[Amy96]

Honestly kind of impressive and terrifying at the same time, four companies moving more money than most countries budgets is wild to sit with

[LuckyDrifter]

What worries me more than the spending itself is the debt and financing structures behind some of these data center deals, if that stuff gets repackaged and sold off it starts looking a bit too familiar