Big tech’s capex splurge may be irrationally exuberant 

From the 19th-century railway mania to the telecoms boom at the dawn of the internet age, cautionary tales abound of over-investment in infrastructure fuelled by excitement over a new technology. With the rise of generative artificial intelligence (AI), history is repeating itself. In recent weeks four tech giants—Alphabet, Amazon, Meta and Microsoft—have pledged to spend close to a total of $200bn this year, mostly on data centres, chips and other gear for building, training and deploying generative-AI models. That is 45% more than last year’s blowout. Tech barons such as Meta’s Mark Zuckerberg admit that it may be years before this investment generates returns. It is an AI arms race.