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Alphabet's revenue rose 24 percent last quarter while its depreciation bill jumped 42 percent and its free cash flow went negative. The gap between reported profit and real cash comes down to one accounting choice: how long a company pretends its AI chips will last. Michael Burry estimates that choice hides roughly 176 billion dollars of overstated profit across Big Tech.
Two AI layoff waves are happening at once and they look identical from the outside. Hyperscalers are firing tens of thousands of workers to fund $725 billion in chip buys. Mid-market firms that fired humans to deploy AI are quietly hiring them back. Forrester and Orgvue both put the regret rate at 55%. Klarna already reversed. Zuckerberg won't.
Microsoft quietly killed 1.5GW of near-term data center builds and walked away from 2GW more in non-binding leases, while seven hyperscalers signed a White House pledge committing to pay for power whether they use the electricity or not. Aggregate 2026 AI capex now tops $660 billion, and earnings drop on Wednesday April 29.