Big tech meets Milton Friedman

Economist Milton Friedman mapped four ways money gets spent: on yourself with your money, on others with your money, on yourself with other people's money, or on others with other people's money. Big Tech, per Semafor, is cycling through all four—and the latest stage looks like Friedman's predicted inefficiency in action. The AI buildout started cleanly: tech giants spent their profits on their own infrastructure. Then they tapped shareholders for their own data centers. Now it's more complex. Wall Street has assembled hundreds of billions in pools—Nvidia's five hundred billion dollars, for instance—that tech companies are using to fund AI startups and compute rental access. Google is deploying bondholder money to help other companies buy chips. Friedman warned that when you spend other people's money on other people, nobody 'is going to be anything like as careful'—and Big Tech's capital structure seems designed to prove him right.

Listen to this story

Hear this and more stories in a personalized audio briefing.

Open The Chonkerton