> We are now in a cycle of competitive escalation between three of the biggest companies in the history of the world, collectively worth more than $7T.
> At each cycle of the escalation, there is an easy justification—we have plenty of money to afford this.
> This helps explain another potential motive for the aggressive behavior we’re seeing from the cloud providers: Defense
so basically we have three tech giants acting irrationally because they know it's better to over-invest and maintain their position than under-invest and lose. As a result, all the tier-2 companies are over-investing because "this is normal" (but they don't have the warchest to sustain it)
the spend is definitely justified by increased market caps - the test will be whether it translates to revenue. It's early to tell. I don't know if a irrational market will last for 10 years (MS PE Ratio has gone from 31.37 to 38.52 in the past ~12 months)
> At each cycle of the escalation, there is an easy justification—we have plenty of money to afford this.
> This helps explain another potential motive for the aggressive behavior we’re seeing from the cloud providers: Defense
so basically we have three tech giants acting irrationally because they know it's better to over-invest and maintain their position than under-invest and lose. As a result, all the tier-2 companies are over-investing because "this is normal" (but they don't have the warchest to sustain it)