AI’s civil war will force investors to pick sides
https://www.reuters.com/breakingviews/ais-civil-war-will-force-investors-pick-sides-2025-02-07/
If the AI Roundheads go to war with tech royalty, don’t bet against them
https://www.theguardian.com/technology/2025/feb/15/if-the-ai-roundheads-go-to-war-with-tech-royalty-dont-bet-against-them
John Naughton:
How else could one explain why four companies that reported combined capital expenditure of $246bn in 2024 – up from $151bn in 2023 – now propose to spend more than $320bn this year on AI, a technology for which no business model currently exists that could conceivably provide a reasonable rate of return on such an investment?
Why are they doing it? Several reasons come to mind, none of them impressive, and all involving the fantasy of getting to artificial general intelligence (AGI). First off, there’s plain old Fomo – fear of missing out – which leads to a conviction that each can’t risk not being in the game. Then there’s terror that there might be an immense “first-mover advantage” for whoever gets to the mythical goal first, with the winner becoming master of the universe. One AGI to rule them all, and all that.
But the most persuasive explanation for the collective madness is the most mundane. It is that tech companies are so obscenely profitable that if they don’t do something risky and exciting with their Everests of spare cash they might – shock, horror! – have to give most of it back to their shareholders. And they would much prefer to cover the countryside with gigantic aluminium sheds – full of Nvidia chips running white-hot, overwhelming electricity grids, lowering water tables and draining reservoirs – than do that.
https://www.reuters.com/breakingviews/ais-civil-war-will-force-investors-pick-sides-2025-02-07/
If the AI Roundheads go to war with tech royalty, don’t bet against them
https://www.theguardian.com/technology/2025/feb/15/if-the-ai-roundheads-go-to-war-with-tech-royalty-dont-bet-against-them
John Naughton:
How else could one explain why four companies that reported combined capital expenditure of $246bn in 2024 – up from $151bn in 2023 – now propose to spend more than $320bn this year on AI, a technology for which no business model currently exists that could conceivably provide a reasonable rate of return on such an investment?
Why are they doing it? Several reasons come to mind, none of them impressive, and all involving the fantasy of getting to artificial general intelligence (AGI). First off, there’s plain old Fomo – fear of missing out – which leads to a conviction that each can’t risk not being in the game. Then there’s terror that there might be an immense “first-mover advantage” for whoever gets to the mythical goal first, with the winner becoming master of the universe. One AGI to rule them all, and all that.
But the most persuasive explanation for the collective madness is the most mundane. It is that tech companies are so obscenely profitable that if they don’t do something risky and exciting with their Everests of spare cash they might – shock, horror! – have to give most of it back to their shareholders. And they would much prefer to cover the countryside with gigantic aluminium sheds – full of Nvidia chips running white-hot, overwhelming electricity grids, lowering water tables and draining reservoirs – than do that.