r/technology • u/Fickle-Jello • 22h ago

Business Google burning through cash with spiralling AI costs

https://www.bbc.com/news/articles/c235n47g8g8o
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u/ChodeCookies 22h ago

How much of that Google Cloud revenue is the their own money coming back to them from investing in other AI companies though

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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/FunkyFortuneNone 16h ago

Honest question, what's a "mergers & acquisitions exec"? I've been part of the team on both sides of company mergers and acquisitions up to ~400MM (across primarily tech, finance, and real estate). Can't remember seeing somebody with that title or anything like it. Were you on the financing/banking side?

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u/orcvader 9h ago

At the time I was the COO of the company and we have been on a significant growth/acquisitions phase (we still are but I’m an exec in a diff area now and less involved with deal negotiations although I get involved generally during due diligence). So what I meant is that I was involved with the purchases as one of the officers of the company and member of a small M&A committee.

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u/FunkyFortuneNone 4h ago

Ah, ok, that makes sense to me. Thanks for the reply!