Silicon Valley's response this quarter? Plans to invest even more.
Capital expenditure of the four largest internet and software companies - Amazon.com, Microsoft, Meta Platforms and Google - is set to total well over US200-billion R3.5-trillion this year, a record sum for the profligate collective. Executives from each company warned investors this week that their splurge will continue next year, or even ramp up.
The spree underscores the extreme costs and resources consumed from the worldwide boom in AI ignited by the arrival of ChatGPT. Tech giants are racing to secure the scarce high-end chips and build the sprawling data centres the technology demands. To do so, the companies have cut deals with energy providers to power these facilities, even reviving a notorious nuclear plant.
They're each trying to convince Wall Street that these huge investments will make their future businesses more profitable than the current ones selling digital ads, goods and software.
Alphabet, Microsoft and Meta were all up slightly in pre-market trading on Friday, while Amazon rose 6.7 before New York exchanges opened. Apple declined in early trading by about 1.1.
