What AI's spending boom is really buying

Tech giants' astronomical spending on AI infrastructure comes with a colossal hedge: In a crucial way, it's not really spending on AI at all. Most of the hundreds of billions of dollars in AI-related capital investment today is going into computing power, hardware, and buildings—assets that will retain real value even if AI itself never pays off. Of course everyone in the AI race—Microsoft, Google, their giant rivals and their startup challengers—views AI as the industry's next big platform and believes it will keep getting more useful and lucrative. But if or when the current investing frenzy subsides, or even if there's a big AI bust, a company that built a giant data center for AI still has a giant data center. That's why no one in Silicon Valley is terribly worried about the risk of overbuilding.