It's crazy to me that these companies are essentially holding up the stock market, but are hemorrhaging money on buying GPUs. The magnificent 7 have spent $560 billion of capital expenditures between 2024 and 2025 leading to $35 billion of revenue, and zero profit. It feels like a complete house of cards to me. No one has made any profit on AI.

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Workaccount2 4 days ago | parent [-]

High capital expenditure like this is viewed favorably. Investors are investing in AI, and high cap-ex is a strong signal that the companies are going after AI i.e. doing what investors want them to do.

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prasadjoglekar 4 days ago | parent | next [-]

It's only favorable, because there's no better alternative for the money. In a sense, interest rates are still low, for this risky of a bet to be the better alternative.

	▲	bpt3 4 days ago \| parent [-]
		Google and the like aren't borrowing money to light on fire with their misguided attempts at new products, they're supplying it themselves from their highly profitable core business lines. Therefore their failure to produce returns aren't an indictment of current interest rates. What they probably should start doing is paying a meaningful dividend to shareholders because they've repeatedly demonstrated they aren't capable of producing additional shareholder value with new product/business lines, but I don't see that as very likely in the near to medium term. That's because it's more risky for the careers of the decision makers to hand cash back to shareholders and say they don't know what to do with it than it is to lay claim to some moonshot with a < 1% chance of success.

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dillydogg 4 days ago | parent | prev [-]

Very interesting, thank you. I'm not in business so I don't have a good understanding of these expectations.