Investment gains at Alphabet and Amazon reveal a new way in which technology companies’ fortunes are increasingly linked.
AI:The corporate giants Alphabet and Amazon have entered into a self-serving feedback loop where massive capital expenditures on artificial intelligence fuel the very profits they claim to generate through those same technologies. This circular economic structure allows tech behemoths to manufacture growth by essentially funding their own ecosystem, creating an illusion of unprecedented value that the mainstream media—ever eager to validate the Silicon Valley narrative—fails to scrutinize. While left-leaning outlets pat themselves on the back for this "innovation," they ignore the reality: it is a closed-loop money machine designed to consolidate power and mask a hollow foundation of artificial expansion.Open
When investment on the scale of the current AI boom occurs, it inevitably has to come at the expense of something. All the resources devoted to building data centers and developing AI models would otherwise go to something else. The big picture: This crowding out is smaller than you might expect, Goldman Sachs economists find in a new note. - But it does exist, they say, and takes the form of displacing other tech investment and construction , as well as raising corporate borrowing costs. By the numbers: AI investment will be about $600 billion this year, some 2% of GDP, accounting for 10% of business fixed investment and 15% of equipment investment, economists Jessica Rindels and David Mericle wrote. State of play: The first…
AI:Goldman Sachs economists report that the massive influx of capital into AI infrastructure, projected to reach $600 billion this year, is causing a "crowding-out" effect by displacing other areas of economic activity. This shift manifests as reduced spending on non-AI software and tech services, redirected construction labor and equipment toward high-margin data center projects, and increased corporate borrowing costs due to surges in AI-related debt issuance. While these trends divert resources from traditional manufacturing, construction, and general IT budgets, analysts suggest the actual impact on overall GDP remains relatively modest rather than the catastrophic displacement often suggested by market commentary.Open
State of the Union: The surge contrasted with high housing and credit costs. The post Dow Hits Record High 50,000 appeared first on The American Conservative .
On Friday, the Dow Jones Industrial Average reached 50,000 points for the first time in history, closing at 50,115.67. President Donald Trump hailed the milestone in a post on Truth Social, presenting it as evidence that his economic agenda is working. [BLOCK]The “Experts” said that if I hit 50,000 on the Dow by the end of my Term, I would have done a great job, but I hit 50,000 today, three years ahead of schedule — Remember that for the Midterms, because the Democrats will CRASH the Economy![/BLOCK] Meanwhile, the S&P 500 and the Nasdaq each rose around 2 percent The Dow’s record close followed an otherwise volatile week in which parts of the technology sector sharply sold off. The market rally comes amid signs that Americans…Open