Investors are (still) worried that Big Tech is spending too much (again)

And how self-driving continues to accelerate

Welcome to Cautious Optimism, a newsletter on tech, business, and power.

This morning we’re looking at new commercial progress from self-driving companies and taking a minute to ask ourselves if the concern about Big Tech AI capex is overblown. Our weekly economic calendar came out last night. You can read it here. — Alex

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Investors are worried that tech companies are spending too much

From the recent earnings cycle:

• Barrons: Do Amazon, Alphabet, and Apple Have an AI Spending Problem?

• Reuters: Big Tech's AI splurge worries investors about returns

• Yahoo Finance: Meta, Microsoft stocks tumble as Big Tech's AI splurge prompts investor caution

You get the picture. It goes on. People are worried big tech spending. And I think it’s hilarious.

We’ve heard this concern before. CO dug into it in July and September, for example. Our first argument was that Microsoft results at the time indicated that AI-derived revenue was scaling just fine, thank you very much. And, more recently, these pages argued that concern regarding the massive capex rush that big tech companies are undergoing today is being overshadowed by preceding trend-wave flops, like NFTs, leading to blanket-dismissal of the potential of a real change coming to tech. The cloud and mobile booms, after all, are far behind us.

We’re back, again, because the numbers keep going up. Here’s a YCharts pull of big tech capex, charted over time: