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AI infrastructure runs on a specific cost curve: compute capacity and power infrastructure require capital commitment well before any model reaches revenue-generating scale.
Tesla and Alphabet both signaled plans to increase spending tied to artificial intelligence investment. Markets responded by selling both: Tesla shares fell 14%, Alphabet shares fell 6%.
The mechanism behind the selloff The market question here is about timing, not strategic direction.
Both Tesla and Alphabet indicated higher AI-related expenditure ahead, which means near-term cash positions compress before returns arrive.
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