mass layoffs announced in tech sector: Meta (10%), Intuit (17%), Linkedin 500 jobs, Cisco (5%), Amazon

[Amishman]

18. it's complicated, but no coincidence that all three are making big investments in AI (directly or indirectly)

The infrastructure for these data centers has become insanely expensive. Tech spending for these buildouts is absolutely bonkers.

For various reasons, companies feel compelled to make that leap or otherwise spend wildly to try to acquire AI features for their products.

The first two companies mentioned are desperate to find some new avenue for the revenue growth that Wall Street expects.

Meta is stagnating, and Facebook is increasingly viewed as the social media platform for old people. They are going all in on their own in house AI data center (hyperion), trying to build out now chapters to their growth model. (I think they are going to fail and be in serious trouble in five years).

LinkedIn is largely in the same boat - their user base is mature and not growing much. They aren't building their own AI, but are a huge consumer of OpenAI's offerings. The massive costs of AI get passed along even though LinkedIn isn't doing it themselves.

Intuit is a different story. Many of their products lines are tax and finance related, rules based disciplines where AI does better. Like LinkedIn, they are indirect consumers (they partner with OpenAI and Anthropic) but are trying to use AI to build out more powerful and less user intensive tools. Again, the bill for the tech and hardware gets passed along to them.