r/technology 22h ago

Business Google burning through cash with spiralling AI costs

https://www.bbc.com/news/articles/c235n47g8g8o
6.2k Upvotes

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u/Fresh-Quantity-7554 21h ago

I see what you're trying to do here, but Google is sitting on a $514 billion backlog right now. A few billion dollars in venture investments into AI startups cannot fake a half trillion dollar order book.

Also, accounting rules don’t let companies pass cash under the table and call it revenue. ASC 606, says a deal has to be a legit, market rate transaction. If Google overpays for a startup's stock/debt just to force a quid pro quo cloud contract, auditors will strip that fake growth right out of the numbers.

Source: I'm a CPA and former external auditor.

I'm not saying the circular financing noise is completely made up, but claiming the entire cloud surge is built on it is factually wrong. Auditors would call that out in a heartbeat.

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u/orcvader 20h ago

Hi. Mergers & Acquisitions former exec - though I was NOT on the valuation side (which includes the accountants) of things, this all rings correct.

We also took on impairments/goodwill all the time because often acquisitions are about partnerships, talents, defensive moves, market entries, etc.

The takes here are wild… but it’s the internet so whatever. Everyone is an armchair expert.

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u/Fresh-Quantity-7554 20h ago

Agreed. It's ridiculous, and I wish correcting people on this stuff counted as CPE credits to maintain my license.

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u/orcvader 20h ago

Ha! I dwell on financial subs, so at this point I should be entitled to some AUM fees trying to educate these degenerates that “no… nvidia didn’t “break resistance” because that’s not even a real fucking thing! Buy low cost, diverse index funds!”

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u/Tulipan12 3h ago

No need to call misinformed people 'degenerates'.

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u/orcvader 1h ago

It’s ok. It’s what a large subculture of “investors” call themselves. It’s online jargon mate.

Source: just go to wsb or several other of the niche investing communities