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Capital expenditure at AI scale creates a timing mismatch that income statements expose without mercy.
Infrastructure procurement and data center buildout hit reported earnings before the compute capacity being built begins generating commensurate revenue.
Alibaba's June quarter sat squarely in that gap: net income fell 75%, with AI spending identified as the driver, and U.S.-listed shares fell 3% in volatile premarket trading after the results were published.
The mechanism behind it is the capital intensity of building AI infrastructure ahead of the revenue it will eventually support.
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