Amazon, Alphabet, Tesla, and Meta reported negative or collapsing cash flow this quarter because they spent all their money on AI infrastructure. Groundbreaking stuff. Companies that spend more than they make have less money than before. Alert the economists.
Meta's cash generation dropped 91%. Not 90%. Not 85%. Ninety-one percent. That's the kind of precision you get when you're explaining to shareholders why the money printer stopped printing. Zuckerberg built a data center the size of Vermont to teach a computer how to generate photos of dogs wearing sunglasses, and somehow the bills got expensive.
Memory costs are soaring. The actual computer chips, not the kind your therapist bills you for. Tech companies need more RAM to run their AI models, and apparently Samsung noticed this and adjusted prices accordingly. Capitalism working exactly as designed. Buy high, sell never.
Tesla's on the list too, which makes sense when you remember Musk fired everyone who knew how to manufacture cars efficiently and replaced them with engineers training neural networks to identify traffic cones. The stock's still up 40% this year because retail traders think negative cash flow means the company's too busy innovating to count money.
The thesis here is simple. Spend a hundred billion dollars now, make it back later when AI solves everything forever. It's a brilliant plan. Flawless, really. The only flaw is that it requires AI to actually solve everything forever, which it will definitely do right after it finishes making knockoff Pixar movies and writing phishing emails that sound almost human.
Your neighbor Gary bought Alphabet calls last week because he read that AI is the future. Gary's cash flow is about to look a lot like Meta's.
Photo by Igor Omilaev on Unsplash
Leave a Comment