tech
How China Gets Better Bang for Its Buck Than America in AI
How much money should companies lavish on artificial intelligence? American tech giants think the answer is: a lot. Their capital spending on data centres may surpass $740bn this year, according to Bloomberg Intelligence, a research firm. Investors, who used to agree, are having second thoughts. When on July 26th it emerged that Nvidia was in talks to underwrite $250bn of a gargantuan $500bn-plus data centre, stuffed full of its chips and run by OpenAI, a leading model-maker, its share price tumbled. Days earlier investors blanched when Alphabet, Google’s parent company, said it would boost its AI spending to $205bn this year. AI stocks in Japan, South Korea and Taiwan have plummeted, too.
TL;DR
- American tech giants are projected to spend over $740 billion on data centers this year.
- Investor confidence is waning, leading to stock price declines for major companies like Nvidia and Alphabet.
- Nvidia's potential $250 billion investment in an OpenAI data center and Alphabet's increased AI spending to $205 billion have concerned investors.
- AI stocks in Japan, South Korea, and Taiwan have also experienced significant drops.