I have been thinking about AI and big tech.
Mainly why are $AMZN, $GOOGL and $MSFT puting gains from their investments to earnings reports.
Then it hit me. It could be because OpenAI, Anthropic and other AI companies are most of their cloud customers.
But the way they are paying for it is by exchanging share in them for cloud credits. So they want to be seen making money when I'm actuality it's all paper gains.
To be fair they are also being paid money from these money loosing companies which they raised from investors and get from customers but they are being poured directly back to buy more compute with no value retained for shareholders.
This is creating the bubble mechanism connecting basically everything to only few companies.
Will productivity increase so much it's all worth it? Or is the time ticking for full blowout of OpenAI and Anthropic when it's time to pay for real costs of LLMs, when only people left paying are the users without any outside capital.
Take into consideration these two are projected to be 48% of $GOOG cloud for next year.
Real earners are $NVDA and other semis, for the time being atleast.
$AAPL is smart just hanging around and rewarding their shareholders with focus on their core business.
In my opinion it's not if but when these 3 will be left holding the bag.
They will still have their core business but now with bloated infrastructure, debt on balance sheet and diluted shares.
Are they really such an amazing investments? Or is it the best time to harvest the ripe fruit?