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The Circuit
Episode 65: Capex to the Moon!
Apr 29, 2024
Ben Bajarin, a technology expert, and Jay Goldberg, a cloud investment commentator, dive deep into the soaring capex of cloud hyperscalers like Google and Amazon. They analyze the link between capex spending and revenue growth, spotlighting the hurdles in monetizing AI investments. The duo discusses the exciting potential of innovations in AI wearables, AR, and autonomous vehicles, while also contemplating the economic impact of these advancements. They emphasize the importance of clear consumer use cases and the deflationary effects on tech costs.
40:04
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Quick takeaways
- The podcast emphasizes the projected 44% year-over-year growth in capital expenditure by cloud hyperscalers, indicating intense competition for infrastructure investments.
- Despite rising CapEx, the hosts express skepticism about the unclear monetization strategies for AI investments and the need for defined consumer use cases.
Deep dives
Skyrocketing CapEx Trends
The podcast details the significant rise in capital expenditure (CapEx) among cloud hyperscalers, projecting a 44% year-over-year growth for 2024. This increase could mean an added $50 billion in spending, with total estimated CapEx reaching nearly $200 billion across major companies like Google, Microsoft, and Amazon. The discussion highlights the competitive advantage that firms are pursuing through these investments in data centers and infrastructure. Notably, Microsoft’s CapEx reportedly surpasses that of TSMC, illustrating the intense competition in the tech space driven by the demand for cloud services.
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