Alphabet's AI Spending Draws Scrutiny as Market Value Drops $692 Billion
Alphabet's parent company has seen its market value drop by $692 billion since hitting an all-time high in May, prompting scrutiny over whether its massive spending on AI will pay off.
The tech giant closed at $342.00 yesterday, down 1.43% from the previous day, and is now 15% below its May peak of $408.37 within a 52-week range that bottoms out at $205.61.
Compounding the skepticism has been a loss of technical talent, with senior AI scientist Jeff Dean departing to launch a startup and Demis Hassabis stepping down as CEO of Google DeepMind, Alphabet's AI research lab, to become chairman.
The capex numbers underpinning the skepticism are stark. Alphabet's second-quarter capital expenditure reached $44.9 billion, roughly double the year-earlier figure, and it has raised its full-year guidance to a range of $195-$205 billion.