🚨 The $2.9 trillion AI war has begun… 100,000 people were fired at the same time
Google, Microsoft, Amazon, and Meta are pouring $400 billion into AI infrastructure this year alone, which is more than the entire EU defense budget.
What is shocking is that they laid off 100,000 technical workers at the same time while making astronomical investments in AI.
However, Wall Street is actively welcoming the “excessive corporate spending” that it usually dislikes. Their excessive spending is now recognized as an essential choice for the leadership of the AI hegemony war.
💰 Big Tech AI Investment Strategy: Is it a winning move or a trap?
Looking at each company’s investment strategy through this second quarter’s performance reveals interesting differences.
Meta is most aggressively investing in a new concept called “personal superintelligence” without any cloud services. Mark Zuckerberg is even bringing Apple’s disgruntled AI engineers to hundreds of millions of dollars a year.
Amazon spent $31 billion on capital spending in the second quarter, nearly all of its operating cash flow, but AWS growth is 18%, well behind Microsoft (39%) and Google (32%).
But what’s really scary is this.
According to Morgan Stanley analysis, a total of $2.9 trillion is needed by 2028, but companies are short of $1.5 trillion in cash alone. The entire financial system has to deal with this unprecedented investment boom.
⚡ The fatal paradox of AI investment: Technology floods, jobs evaporate
What’s worse is that it shows a pattern too similar to the one just before the Great Depression of the 1920s. Even then, the middle class’ purchasing power to consume innovative technologies collapsed, even though they were heavily invested in them.
Except for healthcare, jobs are actually declining in the U.S. job market. Moreover, as big tech job cuts show, human jobs are disappearing faster as AI advances.
The latest July employment report is shocking: 258,000 jobs have evaporated in three months, and 11,000 have been lost in manufacturing alone.
🔍 1920s déjà vu: Does history repeat itself?
The most terrifying thing is that the current situation is remarkably similar to the Second Industrial Revolution of the 1920s. At that time, astronomical investments were made in innovative technologies such as electricity, automobiles, and radio, but eventually the Great Depression came due to overcapacity and deepening income inequality.
Currently, the U.S. is showing severe K-shaped polarization. Demand for premium services is increasing, but the middle-class consumer base is collapsing. Is it okay to ignore these market signals? It’s up to you to decide.