I’m not really convinced by any of this, in fact it seems most of the predictions were pretty correct and that Meta and Alphabet are having big issues is a shared opinion by multiple observers and pretty much every employee they have.

If they were doing so well why the layoffs? Why the tightening both in salaries and perks and work life balance? Why so many choices disrupting morale for their employees?

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george_max 4 hours ago | parent | next [-]

Help me understand where Meta and Alphabet's issues are. They seem to be doing quite well on paper -- nothing anomalous in terms of profitability or scaling recently. Layoffs are to be expected when AI can increase productivity.

	▲	reticulates 3 hours ago \| parent [-]
		Meta narrowly avoided disaster earlier this year: https://www.reuters.com/investigations/mark-zuckerberg-had-b... The problem with judging Alphabet and Meta on aggregate performance is that their advertising businesses print so much money that they can invest everything in a boondoggle and coast when it blows up. Zuckerberg burned $100,000,000,000 on the metaverse and it didn’t make a dent. That said, Alphabet and Meta are borrowing against their future advertising profits to fund their AI boondoggles. If the advertising businesses keep growing then they’re somewhat insulated from their own missteps but the reliability of the advertising business depends on companies having money to spend on advertising. The metaverse was mostly self-contained and the failure had zero consequence for the broader economy. AI on the other hand, every major fund is investing everything into AI companies. Every advertiser is using subsidized AI tools to generate hyper specific adverts. If this all goes south, who knows how advertising spend will be impacted. Google specifically are backstopping billions in data centre build out costs. They’ve committed to spending, like, all of their cash to data centres. If the market gets nervous and funding disappears, Google are deep in the hole. Anthropic “invested” $50bn in data centers to be built by Fluidstack who raised a billion dollars from Situational Awareness who used their Anthropic ownership to raise money to fund these investments. Google are backstopping much of the Fluidstack build out, i.e: if Fluidstack goes out of business then Google is on the hook for $10bn+ in costs. And Google’s Anthropic investment makes up like $100bn on the balance sheet. So, Anthropic fails to live up to expectations and fails to pay Fluidstack who can’t pay their suppliers which puts Google on the hook to hand over tens of billions in cash while at the same time their biggest investment is going down the pan. The top line numbers don’t really do justice to the scale of the risk. You need to look at the long term commitments they’re making.

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baron816 4 hours ago | parent | prev [-]

Alphabet hasn’t had any layoffs, tightening of salaries and perks, or impacts to work life balance. Morale is quite good, imo as an employee