←2026-09-04 · Herbert Simon
Analysis
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Think the cash these tech giants are burning on AI is just that CapEx figure on the first page of their earnings reports?
You’ve got to be kidding. That’s just the tip of the iceberg.
Over the past few years, Meta, Amazon, Microsoft, and Alphabet have dropped trillions on AI. But the off-balance-sheet commitments tucked away in the footnotes are even more insane.
Shocked?
Alphabet is sitting on $\$798\text$ in future investment commitments. Meta is tied up to the tune of $\$696\text$—roughly 10 times its net income over the trailing twelve months (TTM).
If AI fails to monetize, these guys are heading straight for a meltdown.
Over the summer, the Wall Street Journal ran a piece exposing the reality: actual AI spending is far larger than the market realizes, easily blowing past the multi-trillion-dollar mark. When I first saw that conclusion, I got chills down my spine. How can these mega-caps sit in the spotlight every single day without most investors catching this hidden risk in the fine print?
As for the financial reports of A-share companies? Never mind, I didn't say anything.
The Point of No Return
A familiar narrative keeps ringing in the market’s ear: in the AI land grab, the danger of underinvesting vastly outweighs the risk of overinvesting.
Meta’s CEO said the exact same thing publicly. His words were basically: Even if we end up squandering hundreds of billions of dollars, that’s obviously a huge misfortune. But to me, the far greater risk is underinvesting. If super-intelligence lands in three years instead of five, we’d completely miss the boat on a core technology that promises to create the most products, innovations, and value in human history.
In short: throwing away hundreds of billions is a blunder, but it pales in comparison to falling behind on a generational tech shift.
Talk about thick-skinned. Meta pulled in $\$68\text$ in net income over the TTM; misallocating hundreds of billions is playing with fire. But that’s a topic for another day—let's set it aside for now.