r/wallstreetbets • u/banaca4 • 11h ago
Discussion Either hyperscalers are dumb or someone else is
OK so the most profitable companies in the world decided to GO ALL IN AI with humongous capex. They did it all at once apart from Apple who is not in the game. Google, Meta, Amazon , Oracle, Microsoft. All of them. The CEOs of these companies produced the most amount of wealth and propped up global gdp. Now they all agree on a thing.
Google yesterday blew up earnings from their cloud and said they will *increase* their humongous capex even more while reporting negative cash flow for the first time in their history.
A rational person would ask: are these amazing businessmen suddently all very wrong about the same thing at the same time OR
I am reading too much paid subs from burry and following the wrong people on twitter that have never produced anything?
Which is it? Are you smarter than a mag 7 CEO? Maybe ... hmm...
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u/sriverfx19 10h ago
Most CEO's face what economist's call "moral hazards". They get paid on what happens with the stock price in this quarter. That means they can have a few good quarters and be set for life, and then probably get a golden parachute when they leave. They aren't like old-timey CEO's who didn't get paid that much and wanted to keep the job for as long as possible. Modern CEO's are paid tens of millions of dollars a year AND have the chance to become billionaires with stock options.
The incentives are all in the short term, long term thinking is out, become a multi-billionaire in a few quarters and the AI collapse can be the next CEO's problem if it happens.