None are making major profits on AI; none has a technical moat; a massive price war is inevitable. And few of their customers are seeing major returns on investment. Greatest capital misallocation in history.

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Money is starting to flow downhill – a critical observation for the next few years.

The Mags may make all the money but they are spending it faster than they can make it.

Their free cash flows are cratering.

Best to follow the money and see who’s getting it. In this case, it’s following the AI trade and, more specifically, the data center and power economies.

Make money from capital light business models like ads and software, then redirect it to asset heavy, traditional infrastructure companies.

A complete reversal from the last 20 years is underway.

Big Tech’s $700 billion spending on AI this year is called the ‘greatest capital misallocation in history’

Alphabet, Amazon, Meta and Microsoft are depleting their cash reserves and raising debt as AI spending moves even higher

Meta lost 20 million users last quarter