Odaily Planet Daily reports that after Google (GOOG.O) raised its capital expenditure forecast for this year from $190 billion to a range of $195 billion to $205 billion, its stock price fell more than 7% on Thursday, according to MSX.COM data, once again highlighting that the full cost of the Silicon Valley AI competition remains largely unrealized.
Google is the first major tech company to release its quarterly earnings report, with Meta, Microsoft, and Amazon set to report next week. These four companies previously disclosed in April that they would collectively invest up to $725 billion in artificial intelligence development this year; if Google is any indication, that figure could rise further by the end of next week. Nevertheless, the returns on these investments remain uncertain. Thomas Montero, senior analyst at an investment firm, said, "Google's larger spending plan is 'not satisfying.' Coupled with rising interest rates and ongoing supply-demand imbalances in AI infrastructure, the notion that companies can indefinitely rely on cash flow to fund these investments may be losing appeal." (Jin10)