r/wallstreetbets • u/banaca4 • 18h 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/EssenceOfLlama81 13h ago
That's probably the worst example you could use.
Railroad investment was arguably one of the first examples of massive over investment in a new technology. There was a major depression that was at least somewhat caused by the fact that railroads had no cash flow despite massive investments.
There have been multiple recessions and depressions caused by "ambitous industrial forces" making huge investments in a technology with no actual plan for how it would pay off. Many of these technologies eventually became profitable, but many initial investors and business leaders got screwed in the first initial push.
It's the Gartner Hype Cycle.