Ma Bell's history hints that AI could be recession-proof

Wall Street is concerned about the capital expenditure (capex) of major hyperscalers like Amazon, Microsoft, Alphabet, and Meta, which is projected to rise from $200B in 2024 to nearly $700B. Despite falling free cash flow, these companies continue to invest heavily, reminiscent of AT&T's resilience during the Great Depression. While historical patterns suggest that infrastructure spending may persist even in downturns, the current financial landscape is more precarious, with hyperscalers facing competitive pressures and thinner financial cushions. The imperative to invest remains strong, as cutting capex could jeopardize their market position.