"On earnings calls last week, Amazon, Google, Microsoft, and Meta reported more than $350 billion this year on capital expenditures, or longer-tail investments in a company's future. All four told investors to expect the number to skyrocket even further next year: Microsoft said "higher," Amazon an "increase," Google a "significant increase," and Meta "notably larger." That probably translates to more than $400 billion total for the four companies next year, according to Joe Fath, partner and head of growth at Eclipse VC."
"The return on investments for these companies so far is opaque. Dedicated AI companies are burning through cash in the meantime: OpenAI reportedly hit $12 billion in annualized revenue this summer - while reportedly being on track to burn through $115 billion through 2029. Tension over this mismatch, Fath said, is ratcheting up. There's a "push and pull between those companies and investors," he added."
Amazon, Google, Microsoft, and Meta collectively spent more than $350 billion in capital expenditures this year and signaled notable increases for next year. Combined capital spending likely exceeds $400 billion next year. The immediate return on those investments is unclear. Dedicated AI companies are burning large amounts of cash even as some report rising revenue; OpenAI reportedly reached about $12 billion in annualized revenue while also facing projected cumulative burn through 2029. Investor-company tension is increasing as investors press for clarity on timelines and the prospect of meaningful returns from heavy AI spending.
Read at The Verge
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