Big Tech's AI spending spree: Smart long-term bet or short-term risk? (www.cnbc.com)

Big tech’s major players are pouring billions into AI this earnings season, with Amazon, Microsoft and Google all raising capital-expenditure guidance as they build out AI infrastructure. The CNBC Investing Club’s recent debate highlighted a market tug-of-war: investors pummeled AI-heavy stocks this week amid worries that the burn rate is outpacing near-term returns, even as executives double down on spending to secure long-term advantage. Club analysts argued both sides — that heavy upfront investment is necessary to avoid falling behind, while skeptics note efficiency gains and improved margins tied to AI have not yet materialized in earnings. For the AI/ML community, the story matters because the scale and timing of these investments will shape compute availability, prices and product roadmaps. Increased capex typically funds data centers, GPUs and specialized hardware, expanded cloud services, and model development — all of which can accelerate R&D and deployment if they translate into real productivity gains. The key implication: these bets could lower long-term unit costs and enable new AI applications, but they also introduce short-term valuation and cash-flow risk for firms and investors until measurable efficiency and revenue improvements appear.