Morning Briefing: How AI costs destroy billions on the stock exchange
So far, the costs of the AI boom have not been in a good ratio to the revenues of the large tech groups. This is making the markets uncertain, as hopes exceed the number of profiteers.
Good morning, esteemed readers, the unfavorable relationship between the costs of the AI boom and the current earnings of major tech giants is now causing significant market uncertainty. On Thursday, all three major US indices reported losses, with the tech-heavy Nasdaq suffering the largest decline at 1.4 percent. This was primarily due to Alphabet's Google parent company, whose shares dropped nearly 13 percent, resulting in a loss of nearly 500 billion dollars in market value, one of the largest single-day losses in history.
The flight of investors was triggered by the company's published quarterly results the evening before. Above all, the AI business appears unfavorable from the investors' perspective. Significant costs for building up computing centers are coupled with comparatively small earnings from AI searches. Another example, an equally surprising phenomenon: unexpectedly high costs for building new AI computing centers and an unexpectedly weak outlook for the Christmas season are weighing on Amazon's balance sheet.
The cash outflow has almost quintupled to 42.4 billion dollars in the past three months, the digital conglomerate announced late Thursday evening after the market closed.
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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