I Was WRONG About AI? | Steam, Epic Games, and More

Live: Google’s AI spending just outran its cash, Democrats are getting ahead of an AI bailout, and gamers are paying the price for all of it. Let’s talk the economics of AI.

First, I was wrong about Google. Alphabet’s Q3 earnings showed a record $51.4 billion in capital spending, more than double a year ago, and negative $9.1 billion in free cash flow. That is the second straight quarter in the red on cash flow. Google is still profitable, but it is spending more on the AI buildout than its operations bring in, and it plans to spend even more next year. If Google cannot make the math work, what does that say about everyone else?

Second, the politics. A House resolution from Rep. Greg Casar says the government should not bail out AI companies if the bubble pops. That is the right position, even if it is not coming from sound economics. A new ABC News, Washington Post and Ipsos poll found 57% of Americans think AI is bad for society, and Democrats are already running ads in swing districts on it. AI is becoming a core midterm issue, and the pitch for a bailout is already being set up: beat China, too many industries depend on it, too big to fail.

Third, what it means for you. GPU and RAM prices are out of control. RTX 5080s are selling for $1,800 to over $2,300, Nvidia now makes about 90% of its revenue from data centers, and Micron shut down Crucial to chase AI customers. Gamers are not the customer anymore.

Let them fail. Getting the government involved in picking winners and losers makes it worse. Come hang out and let me know where you stand.

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#AI #Google #Economics