Concerns over $205 billion in spending push, Google falls by more than 7%

Odaily Planet Daily reports that after Google (GOOG.O) raised its forecast for this year’s capital expenditures from $190 billion to $195 billion–$205 billion, its stock price fell by more than 7% on Thursday, according to MSX.COM data. This once again serves as a reminder that the full cost of the Silicon Valley AI competition still remains largely unaccounted for.

Google is the first major technology company to publish quarterly earnings; Meta, Microsoft, and Amazon will release theirs next week. In April, these four companies previously disclosed that they would cumulatively invest as much as $725 billion this year in AI development. If using Google as a reference, that figure would further increase by the end of next week. Even so, the returns on these investments remain unclear. Thomas Monteiro, a senior analyst at an investment firm, said: “Google’s larger-scale spending plan ‘is not very satisfactory.’ Coupled with the continuously rising interest-rate environment and the ongoing supply-and-demand tightness for AI infrastructure, the notion that the company would always rely on cash flow to finance itself may be gradually losing appeal.” (Jin10)