Warning of an Accounting Time Bomb Amid AI-Driven Financial Market Rally
A warning has emerged that an accounting time bomb lurks behind the global financial market rally triggered by artificial intelligence (AI). Recently, investors have been exuberant about the future rosy growth brought by the massive capital expenditures (CapEx) of big tech companies. However, there are concerns that the large depreciation costs generated by these investments are being underestimated.
According to a report from The Information, a U.S. IT-focused media outlet, Oracles AI server rental business has maintained an average gross profit margin of only 16% over the last five quarters. This reveals how significantly the high costs of graphics processing unit (GPU) investments are pressuring profitability.
In a previous earnings announcement for the second quarter, Susan Li, CFO of Meta, highlighted that the primary factor driving cost increases in 2026 would be infrastructure costs, with depreciation expected to sharply accelerate. This indicates that the bill for AI investment is due soon. The Economist, a UK weekly, referred to this situation as a $4 trillion accounting puzzle at the core of the AI cloud industry.
The backdrop of these concerns is the intensifying competition for AI dominance. The race among hyperscalers—large cloud service providers—to build infrastructure has rapidly escalated. Microsoft, Alphabet (Google), Amazon (AWS), and Meta, known as the big tech four, are pouring astronomical amounts of money into securing AI model training and inference capabilities, fundamentally altering the flow of global capital markets.
Their investment scale has consistently exceeded market expectations. In the second quarter of this year, the combined capital expenditures of these four companies totaled approximately...
According to a report from The Information, a U.S. IT-focused media outlet, Oracles AI server rental business has maintained an average gross profit margin of only 16% over the last five quarters. This reveals how significantly the high costs of graphics processing unit (GPU) investments are pressuring profitability.
In a previous earnings announcement for the second quarter, Susan Li, CFO of Meta, highlighted that the primary factor driving cost increases in 2026 would be infrastructure costs, with depreciation expected to sharply accelerate. This indicates that the bill for AI investment is due soon. The Economist, a UK weekly, referred to this situation as a $4 trillion accounting puzzle at the core of the AI cloud industry.
The backdrop of these concerns is the intensifying competition for AI dominance. The race among hyperscalers—large cloud service providers—to build infrastructure has rapidly escalated. Microsoft, Alphabet (Google), Amazon (AWS), and Meta, known as the big tech four, are pouring astronomical amounts of money into securing AI model training and inference capabilities, fundamentally altering the flow of global capital markets.
Their investment scale has consistently exceeded market expectations. In the second quarter of this year, the combined capital expenditures of these four companies totaled approximately...
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