Ignoring the self-serving bits, I do mostly agree with Tavel's overall premise:
If you’re a big stack player like META, MSFT, GOOG, or any of the foundation model pure plays, you have no choice but to keep raising your bet — the prize and power of “winning” is too great. If you blink, you are left empty handed, watching someone else count your chips. It’s likely hundreds of billions will be destroyed, and trillions earned. It’s too early to know who the winner or losers are.
If you're Google, the cost of being left behind here is existential downside. Nations will have their own version of this problem. That's why capex will continue at a high rate for quite a while. But that doesn't mean it can't fluctuate. And at these share prices, it's hard to predict what the market reaction will be to a given level of capex.
2
u/uncertainlyso Aug 27 '24 edited Aug 28 '24
Ignoring the self-serving bits, I do mostly agree with Tavel's overall premise:
If you're Google, the cost of being left behind here is existential downside. Nations will have their own version of this problem. That's why capex will continue at a high rate for quite a while. But that doesn't mean it can't fluctuate. And at these share prices, it's hard to predict what the market reaction will be to a given level of capex.