Google's announcement to increase capital expenditure by $10 billion to $85 billion in 2025 raises eyebrows as it invests heavily in permanent infrastructure for AI. The company is joining others in a race that carries risks of overspending on assets such as data centers and GPUs. Despite ongoing fears about the sustainability of these investments, promising indicators are emerging, including significant growth in Google’s generative AI token processing and cloud sales. Yet, the question remains whether the return on these high levels of spending will meet investor expectations.
Google's capex hike to $85 billion in 2025 raises concerns due to irreversible investments in permanent assets like chips and data centers amidst an AI arms race.
Big Tech's race for AI dominance entails significant capital expenditure, with companies like Google, Meta, and OpenAI investing heavily in infrastructure that cannot be easily reversed.
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