2050 Billion Spending Sparks Concerns, Google Falls Over 7%

Odaily Google (GOOG.O) saw its stock price drop over 7% on Thursday after raising its capital expenditure forecast for this year from the previous $190 billion to a range of $195 billion to $205 billion. This serves as another reminder that the full cost of Silicon Valley's AI competition remains largely uncertain.

Google is the first major tech company to report quarterly earnings, with Meta, Microsoft, and Amazon set to follow next week. These four companies had previously disclosed in April that they planned to invest a cumulative total of up to $725 billion in AI development this year. If Google is any indication, this figure is poised to increase further by the end of next week. Nonetheless, the returns on these investments remain unclear. Thomas Monteiro, a senior analyst at the investment firm, stated: "Google's larger spending plan is 'unsatisfactory.' Coupled with a rising interest rate environment and ongoing supply-demand tensions in AI infrastructure, the idea that companies can always rely on cash flow to finance their operations may be gradually losing its appeal." (Jinshi)