AI Is Making Big Tech Weaker (www.wsj.com)

Big tech remains profitable, but massive AI investments are reshaping their finances and strategic positions. Microsoft, Alphabet and Amazon have poured what’s expected to be more than $600 billion into AI since 2023, funding large-scale training compute, data-center buildouts, custom silicon and hiring ML talent. That capital intensity—plus ongoing costs to serve and fine‑tune large models—has squeezed margins and diverted cash from other growth or return-of-capital priorities, even as companies race to secure long-term AI leadership. For the AI/ML community the shift matters because it changes incentives and market structure: incumbents are betting on scale and proprietary models to defend moats, which raises the bar for compute, data and engineering resources needed to compete. It also drives faster innovation in model architectures, tooling and chips, while increasing regulatory and supply‑chain scrutiny. For investors and practitioners, the takeaway is that AI is forcing tradeoffs between near‑term profitability and strategic positioning—making cost, deployment efficiency and measurable product value central to future success.