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by smithcoin 100 days ago
Cutting layers of bureaucracy not replacing with AI
2 comments

Google's projected AI capex spend is $170-180 billion for this year. It's unreasonable to think AI would not be a reason for companies to consider layoffs.
There are two ways to interpret your comment:

1. Google is getting so much productivity out of their AI that they need fewer people.

2. Google is spending so much on AI they can’t afford to keep the people they need.

Or

3. Google is spending so much on AI that they can't afford to keep paying people, but they are ok with this because they are convinced the AI investment will replace the people at an eventual cost savings.

That seems to have been Dorsey's approach. The business has been stagnant, so cut the roster and bet big on some future returns from AI.
Google (and almost all other BigTech) is spending on scaling compute (data centers/securing power generation/chip contracts). My comment was not related to AI producivity and its impact on reduction of workforce. I believe a company spending nearly all its free cash flow on scaling compute (or borrowing money to do so) would have a different opinion on the economics of human capital.
I subscribe to the second point of view. Several companies fall in that bucket. Oracle comes to mind.
Does that include R&D? Google is an AI _provider_, which is a considerably different profile in terms of spend from companies who are consumers. I would expect Google to be investing considerable resources to keep up with Anthropic and OpenAI.
I don't think it includes all of the R&D. From what I've read that's the amount they will spend on infrastructure for AI.

I guess some of that infrastructure will get used for AI R&D, but there are other R&D costs such as salaries that wouldn't be included in the figure.

Some of this smells purely nihilistic. The market rewarded layoffs with higher stock prices, incentivizing more layoffs.
It sure didn't reward Atlassian. If anything it accelerated the long, downward slide.
Atlassian hasn't made money in 10 years. Of course they can't ride on the latest stock slop meme, that company is such an unmitigated disaster it beats even their terrible software. And now they keep spamming me with that Rovo garbage, god I hope they go down among all of this.
I dont think zuck cares especially much about the stock price. He's certainly not beholden to any shareholders. He's doing this because he genuinely thinks it will help the company to trim the fat.