2. Why I Only Look at Capital Expenditure

To clarify this, we need to go back to the "map of money" that I've been talking about.

In the game of AI, money flows downstream station by station: At the very upstream are a few giants who provide the capital (Google, Microsoft, Amazon, Meta)，疯狂 spending on building AI; as the money flows down, it enters chip manufacturers like NVIDIA and TSMC; further downstream, it flows into HBM memory, advanced packaging, optical modules, power supply, and so on...

Google stands at the very upstream of this river — it is the one providing the capital, acting as the faucet for the entire AI industry chain. Its capital expenditure is the switch of this faucet:

When the switch is turned up (capex increases): The river water remains abundant, ensuring that downstream companies like TSMC, memory factories, and power companies have enough to eat;

When the switch is turned back (capex tightens): No matter how lively the downstream sector is, once the water source shrinks, the entire river will eventually follow suit and decline.

Advertising is Google's own business, while capex represents its bet on the future of AI — which is also the livelihood of thousands of downstream companies. As for whether those receiving the water downstream can keep their profits, that depends on the "three locks," which we discussed in previous posts, so we won't elaborate today.

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