Google, Amazon and Microsoft have been burning absurd amounts of money in Ia for years. Finally they begin to see green sprouts

The AI boom made Big Tech will increase their capital spending to limits that had never been seen. The fear that The bubble will explode Rondaba, investors They started to get nervous and the profitability of AI remains in doubt. The last results are a green outbreak, the first in a long time, although with many buts.

The cloud reaches capex. They tell it in The Information. Capital or Capex expenses of the Big Tech in recent years have climbed unstoppable, much faster than their income, but in the results of the last quarter the gap is finally closing, but not because chatbots and other products are being profitable, but thanks to revenue from cloud services. The crazy one is committed to AI is beginning to show a slight green outbreak, even if it is not directly because of AI products.

Income from cloud services are approaching capital spending. Source: The Information (click on the image to access X)

The four riders. There are two clear winners of the departure, one that already brought the duties done and one that goes free. Let’s see who is who:

• Microsoft: The clear winner with a Income increase of 25% In the last quarter, mainly thanks to the growth of Microsoft Azure.
• Google: Record a 20% increase In your income thanks to Google Cloud and advertising.
• Amazon: falls 7%but it is the only one that was in positive numbers. Amazon Web Services is the largest provider of cloud services and was already profitable, although its growth is beginning to slow down.
• Goal: Your income grows 22%but they basically come from advertising. Goal does not sell cloud services, so it does not generate income directly. Indirectly, yes: AI has allowed them Improve the efficiency of your advertising business.

Burning money. The increase in capex by AI has reached madness figures that had never been seen in other technological booms. By the end of 2024 we talked about investing a real barbarity In data centers: Microsoft 30,000 million, Goal 35,000 million, Google 25,000 million… The dizziness figures, and have not stopped increasing. Amazon said at the beginning of the year that He wanted to spend 100,000 million in data centers for AI and goal is building several data centers whose combined cost could rise to 200,000 million dollars.

Skepticism. This excessive spending frenzy soon unleashed a wave of skepticism. AND If AI is another bubble And is it about to explode? Milmillionaire investments are not translating in income. Even Satya Nadella himself, one of the protagonists of this revolution, was skeptical because At the moment no one is making gold with AI. It is not that they are not making gold, it is that nobody is earning money. In their newsletter, Ed Zitron had accounts And the difference between what is expected to spend in 2025 and the return that is giving them the AI is not that it is a reason to doubt, it is directly no sense:

Green outbreak Yes, in singular. The latest results are hopeful, but we are very far from being able to say that AI is a profitable business, especially As far as generative AI is concerned. Good results are thanks to cloud services, chatbots or audio or video generators are not profitable. Subscriptions to these tools are a way to monetize, but The income they generate is child compared to spending. Despite doubts, unbridled expense has not stopped and this green outbreak can be more than enough for investors to continue throwing banknotes to the AI well.

Image | Microsoft

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