Microsoft and Alphabet reported capital expenditure figures that fell short of analyst expectations, adding to growing concerns about the cost and sustainability of the artificial intelligence infrastructure build-out.
The two major cloud and AI players are key bellwethers for how the tech industry is managing the enormous spending required to develop and deploy and supporting capacity. Lower-than-forecast capex from both companies suggests either slower demand for AI resources than some predicted, or a strategic decision to moderate spending growth.
The miss signals potential pressure on the economics of AI development and raises questions about whether the industry can justify the scale of infrastructure investment underway.
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