Hello, and welcome to TechScape. I’m your host, Blake Montgomery, US tech editor at the Guardian. Today, we examine how a slew of tech earnings predict an expensive future for everyday electronics buyers and two big developments in the UK tech world: Workers at Google DeepMind, headquartered in London, petitioned to unionize to stop their employer’s military work. And UK police are increasingly adopting live facial recognition, with considerable consequences.
How the AI boom will force you to spend more money
Last week, a slew of tech heavyweights reported their quarterly financial results. The earnings demonstrated that the dominant financial trend of the AI boom isn’t stopping: spend, spend, spend. It’s what the tech giants are doing, and you’ll probably be doing it soon, too. Colossal demand for computer memory is driving up costs for electronics, from vast arrays in datacenters to the smartphone you’re using to read this email. Chip makers are raking in profits, and judging by ominous predictions from executives, consumers will pay higher prices very soon.
Google, Microsoft, Amazon and Meta all disclosed their earnings on the same day, beating Wall Street’s expectations on most topline metrics. Three of those – Google, Microsoft and Meta – revised their projected capital expenditures upwards by tens of billions, indicating to investors that their spending on physical assets like property, buildings and equipment – datacenters, essentially – will rise significantly in the coming fiscal year. Amazon’s spending, about $200bn projected this year, could hardly go any higher.
When investors heard the news from Google and Microsoft, they were thrilled. Both companies reported double-digit growth in cloud revenue. Meta, not being in the business of cloud computing, took a beating in its stock price after noting rising spending on AI infrastructure. Even though the company’s advertising business has grown with the adoption of AI and its overall revenue topped expectations, investors seem to see a clearer through-line from AI infrastructure investment to cloud computing than to ads.
The skyrocketing cost of computer memory is one of the main reasons why tech giants’ spending is increasing. Both Microsoft and Meta said that the rising prices of memory chips, driven by demand and constrained supply, is having a significant impact on their spending. Microsoft’s finance chief said the company will spend $25bn more than it anticipated on computer components because of increasing prices.
Consumers will not be so enamored with tech giants’ spending as Wall Street. The next device you buy will probably be more expensive. Three more companies’ earnings reports can tell us why.
When Apple reported its earnings last week, they were stellar. Everyone,…
Source link
Disclaimer
We strive to uphold the highest ethical standards in all of our reporting and coverage. We blogs.grocliq.com want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.
Website Upgradation is going on for any glitch kindly connect at [email protected]
