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Feb 10
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WATCH
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Deirdre Bosa
Anchor/Reporter, CNBC Tech Check
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US Big Tech is spending over $500B on AI, while Databricks CEO states Chinese models are "right behind us and they're basically free." This highlights a massive ROI risk. If US Tech is spending half a trillion dollars to achieve "Frontier" status, but "Good Enough" models are available for a fraction of the cost, the US Hyperscalers may be over-investing in a commoditized asset. The market is asking, "What if you don't need to spend that much?" WATCH (Negative Bias). If the narrative shifts to "AI is a commodity," the massive capex spend will be viewed as capital destruction, compressing multiples. The "Frontier" models may achieve a capability jump (AGI) that "Good Enough" models cannot replicate, justifying the spend. |
CNBC
U.S. vs. China AI spending gap widens
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