Business
The AI Capex Paradox, Explained Using Monsters From the Odyssey
As lifelong classicists and Christopher Nolan fans know, one of the ordeals that Odysseus and his crew endured on their way home from Troy came when they had to sail their boat between two hazards: the sea-monster Scylla and the whirlpool Charybdis.
It’s really a lot like earnings season. As they prepare to parse the latest results from Microsoft and Meta Platforms, investors also need to keep two perils in mind.
🌀What if these companies spend too much? Alphabet’s earnings last week crystallized this side of the equation. The company raised its capital-expenditure guidance to $200 billion. The shares dipped, reflecting investors’ worry that artificial intelligence won’t generate enough returns to justify that epic spending.
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