Comment by jmyeet
2 months ago
So I think it's fair to say that AI isn't going away. That doens't mean that SpaceX, OpenAI and Anthropic won't crash. But I've long believed that within 5 years we'll have access to relatively cheap hardware that can run sufficient but not cutting-edge models locally. You can buy a 5090 PC for <$5000 already so I guess it's already true but I think we'll do even better.
So what happens? Nothing. If Apple make M7 Max/Ultra computes with 128-768GB of RAM and nobody buys them then... nobody buys them. Apple isn't betting the entire company on AI just like Google isn't. The rest of the internals are the same Macbook, Mac Mini or Mac Studio. You're just selling something with less RAM.
> Google isn't
Google sold (will sell?) about $70bn worth of Google shares to fund AI infrastructure build outs. It's also issued bonds (=debt; I forget the number, $30bn?) to pay for more infrastructure. Fairly sure it also has established a shadow company, a Special Purpose Vehicle (SPV) to stash away unpleasant financial things it doesn't want to show, also for the AI build out.
Amazon, Google, Meta, Oracle are overstretching at the moment. They are predicted to become cash flow negative (more money going out than coming in) if they keep going at this rate, some time in 2027 or 2028.
Now, they won't go bankrupt but it's possible they will be hit by huge restructuring waves once the dust settles.
Google has a market cap over $4 trillion and it's 2025 financials were $130 billion profit on $400 billion revenue, which was something like 15% Y/Y growth.
$100 billion in equity and bond offerings is not betting the farm on AI.
Additionally, Google's data centers are notoriously efficient and they build their own networking hardware as as their TPUs. Now their TPUs lag behind NVidia offerings obviously but they'll keep getting better.
Google is the company I'm least concerned about in the AI space.
As for Amazon, I'm not sure what their split is on in-house AI build out and usage vs AWS. I suspect the majority is for AWS and I also suspect their ROI is insanely short (ie less than 5 years) on any AI capex.
A lot of us on HN dismiss Oracle with good reason but it's also fair to say they've survived and thrived through the dot-com crash, the GFC and the pandemic until now. They're clearly doing something right.
Meta I think is the Sick Man of Tech. Their social media assets are of declining value (IMHO) and they seem completely unable to adapt to changing conditions. The whole Metaverse was a massive $70B+ boondoggle on something long before they had anything resembling a product-market fit. They seem unable to leverage their social media assets for building any competitive AI products or tech. Plus they seem unable to hire and retain key staff in this space.
https://s.yimg.com/lo/mysterio/api/619866B692DE6F8A91F783066...
> Google has a market cap over $4 trillion
For the purposes of most financial discussions, the market cap can be ignored. It tells almost nothing about the business fundamentals.
> and it's 2025 financials were $130 billion profit on $400 billion revenue, which was something like 15% Y/Y growth.
Most of that growth, which has re-accelerated, is AI driven. Aka eggs in a single basket.
> $100 billion in equity and bond offerings is not betting the farm on AI.
That's on top of capex of $185bn in 2026. In 2023 it was $32bn, 2024 $52bn, 2025 $91bn.
All your financial alarm bells should start ringing.
Amazon is doing similar things.
> A lot of us on HN dismiss Oracle with good reason but it's also fair to say they've survived and thrived through the dot-com crash, the GFC and the pandemic until now. They're clearly doing something right.
https://www.reuters.com/business/autos-transportation/cost-i...
Oracle is the most likely to go bankrupt out of all these companies outside of AI labs. They've been very adept at financials until now, when they've bet the farm on explosive AI revenue and especially profit growth. If those don't materialize soon, bye bye Oracle! Which would probably make a great many engineer happy :-))
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I find it very unlikely that nobody buys them, some people will definitely buy them to run giant open LLMS. But there's also not much risk to apple because those configs would probably be made to order