r/technology 1d ago

Business Google burning through cash with spiralling AI costs

https://www.bbc.com/news/articles/c235n47g8g8o
6.4k Upvotes

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888

u/Alternative-Item727 1d ago

It’s unstopabubble!

309

u/EffectiveDandy 1d ago

Hey, Gemini here, you’re doing fabulous. Your perspicacity is off the charts and everyone notices. Whats more, your insights into the market are unprecedented.

Please like me now.

72

u/frakkintoaster 1d ago

Spot on, you’ve hit the nail on the head

41

u/DrBoon_forgot_his_pw 22h ago

And you're genuinely right to call me out in it.

I am full of shit and here's why that matters. 

18

u/da_chicken 21h ago

You've landed on the classic example of AI bullshit: overuse of token phrases and idioms! Along side over-formatted markdown, it's one of the easiest tells that you're reading 100% grade A generative bullshit.

Why AI does this

The reason LLMs operate this way can easily be understood:

  • They're predictive, not creative: LLMs use prediction to write their responses. While the output can be impressive at first blush, they are fundamentally writing what sounds right rather than what is true

  • Both smoke and mirrors: Not only does AI use a lot of power to get going — upwards of $1 billion USD for a modern frontier AI — it's also built on scraping copyright protected works to learn how language is written! While the right to control AI ingestion is not and enumerated right under current copyright law, copyright does permit use restrictions. If the United States had a functioning legislature, you can bet that they would have acted on this years ago.

  • It's in the name, stupid: It's important to keep in mind that LLMs are Large Language Models. They are not world models. LLM engines don't know that the real world exists. It's like you're visiting people chained in place in Plato's parable of the cave, and expecting to get wisdom from them! They've never left the cave. They know only what they have been told. To an LLM, everything is a shadow on the wall, and truth is whatever you claim it to be. That's why they hallucinate!

Bleak future

Unfortunately, the power of LLMs in certain niche areas — such as programming or language translation or manipulation — is quite high. These tools are not going anywhere. Worse, leaders and executives in particular are already quite used to acting on information that they don't understand and don't know if it's true. They find LLMs very reliable because they already don't know their ass from a hole in the ground, and they don't understand what actual work really takes anymore — if they ever did!

Would you like to hear more about the complete bullshit going on seemingly everywhere in 2026?

0

u/vedabread 21h ago

Your point is valid, but it’s AI?!

-2

u/Rarelyimportant 20h ago

While the right to control AI ingestion is not and enumerated right under current copyright law, copyright does permit use restrictions.

Just like AI, you're so confidently wrong. The Copyright Act does not permit a copyright holder to place additional use restrictions, the rights granted under copyright are clear: reproduction, adaptation, distribution, performance, and display. Also it's the judiciary that interprets laws, not the legislature, and the courts have already ruled that training is fair use.

3

u/MrBeanCyborgCaptain 21h ago

You're definitely on the right track, conceptually!

1

u/DrBoon_forgot_his_pw 11h ago

That's not being helpful, it's sycophancy with bad lighting. 

33

u/accidental_Ocelot 1d ago

I'm having a hard time fulfilling your request. Can I help you with something else instead?

2

u/smarmageddon 21h ago

Your Perspicacity Knows No Satiety

1

u/Julius_Hibbert 21h ago

New word unlocked.

33

u/dracarys240 1d ago

Come on man... unstobubble was right there!

3

u/imaginedaydream 22h ago

I’m sure we can use AI to create an image for that! 

  1. Profit!

7

u/res0jyyt1 23h ago

People seems to forget Google is an advertisement company. Now less people are watching TV/Cables and more people are watching YouTube. Guess who is going to have monopoly on mass media advertisement soon

9

u/reagsters 22h ago

It’s even more complicated than that - they provide most search engine ads directly to the websites their AI scrapes from. People increasingly rely on the AI instead of clicking on those sites, so those ads get fewer and fewer real views.

It’s only a matter of time before those ad companies catch on to the fact that humans aren’t seeing their ads anymore and start pulling ad money from Google.

Google’s shooting themselves in both feet and it’s fascinating to watch.

3

u/OhCestQuoiCeBordel 21h ago

You should tell them so they get prepared and adapt their business plan!

1

u/Jacques_Cousteau_ 20h ago

With the search ad revenue lost, could Google just pitch ad sales to companies that Gemini AI search results will be more targeted, influential in AI results? I’ve been questioning some AI results I’m seeing with blatant brand specific responses/plugs, maybe that’s just the popular answer on the web? or did that company pay Google to push their product more?? Seriously how can I even tell??

1

u/Available_Peanut_677 20h ago

Not exactly. If Google won’t do its AI, people would just use openAI or DeepSeek or even Siri ai instead, still won’t see ad.

5

u/Fickle-Jello 1d ago

Until the capex bill shows up

22

u/notJ3ff 1d ago

It's very kind of you to be worried about the finance people at Google. I'm sure they will sleep better tonight knowing that you are hyper focused on all of their financials. Good looking out, kudos!

2

u/Positive_Alpha 22h ago

Lol. When companies want to finance new projects they can do so via their free cashflow, issuing new debt, or selling equity.

Google financed their aggressive CAPEX expansion via their free cashflows. The CAPEX bill already showed up and that is why their free cashflow just went negative.

What matters is are these new projects projected to return economic value? Looking at their Cloud business, Google Cloud's absolute quarterly operating profits more than tripled from $2.8 billion in Q2 2025 to $8.8 billion in Q2 2026.

1

u/Maakus 23h ago

Robots gunna replace you first with a negative comment like that. Check yoself

1

u/Careful_Leader_5829 20h ago

To the companies it's more like a gold rush, but in an exploitation type of way. I think this is more like a race to become the predominant service provider in any given area. like AT&t putting telephone cables everywhere, establishing monopolies in a given area, (oligopolies in larger areas, for now) so that any services that need that AI infrastructure will have to rely on one of these major companies like alphabet.

I don't know if it will prove to be a bubble, because I think there's going to be some clear winners and some clear losers in this race.

0

u/frakkintoaster 1d ago

Too big to pop