Both Meta & Microsoft have said they're shedding staff explicitly to free up cash flow to invest in AI;
on one level this is unemployment linked to technology, but its a bit different from *actual* technological unemployment - the latter sees people losing jobs due to the deployment of technology to do their jobs. Microsoft & Meta on the other hand are sacking people to take a (bigger) punt on a business strategy that is yet to prove its transformation of productivity.
Oracle invoked the same argument.
Extraordinary times whatever the interpretation.
One possibility is that they don't think its a risky move. How can they be so sure? Only if they know they have a stranglehold on users and can push "AI" in all eventualities.
Another possibility is that they are actually "bust", not literally - as in bankrupt - but in terms of defending their astronomical valuations: the risky bets aim to avoid a massive correction.
Time will tell I suppose...
I think the final post may be right - one last throw of the dice in a bid to avoid a 'correction' in their share price (see the warning today from the BoE about UK share prices, which is just as applicable to US ones, in my view)
@ChrisMayLA6 yes, I have seen today an economist talk about the Wile E Coyote effect (in relation to the Iran war and the oil crisis). People seem to want to have their stock market party go on forever, decoupling it from annoying reality.
But in the end, forecasting is hard, especially when it is about the future 🤣. A tech bubble burst has been predicted several times already. The monopoly position of those companies does give them remarkable resilience...
Emeritus Prof Christopher May
Open Risk