Tech giants like Alphabet, Amazon, Meta, and Microsoft are set to spend about $200bn on infrastructure for building generative AI models, a 45% increase from last year. Returns from such investments may take years, leading to an AI arms race.
Aside from infrastructure investments, tech firms are also heavily involved in funding foundational AI model startups through VC. This trend has traditional VC firms concerned, recalling the dotcom era. Potential overcapacity risks loom, with significant consequences in the stock market.
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