Quote of the day by investor Warren Buffett on AI capex: "That's real
money... That kind of money wasn't even put in the railroad business" outlining his bullish long-term thesis on AI

Date:
Sat, 01 Aug 2026 22:00:00 +0000

Description:
AI companies are depleting their cash reserves and pouring historic levels of money into the AI buildout

FULL STORY ======================================================================Copy link Facebook X Whatsapp Reddit Pinterest Flipboard Threads Email Share this article 0 Join the conversation Follow us Add us as a preferred source on Google Newsletter Subscribe to our newsletter AI demands a huge amount of energy, water, compute, and, of course, money. Big tech companies, including Google and Meta, have pledged huge sums of money toward the capital expenditure (capex) to continue the push to more powerful AI. But many inventors feel increasingly wary that this spending is simply swelling an already inflated bubble. "With Google and all its competitors now, they're laying out hundreds of billions of dollars. That's real money... That kind of money wasn't even put in the railroad business. And that's the game they're playing now. They weren't playing that game with computer software." Warren Buffet, July 2026 Laying the tracks Speaking with CNBC in July 2026, the legendary investor Warren Buffett, who recently retired, weighed in on the capex debate. Quote of the day This article is part of TechRadar Pro's QOTD project to provide an insight into the minds of the brightest and most recognized figures in the technology industry today and in years gone by.
Read the full series here . Big tech companies are pledging a huge sum to the AI infrastructure buildout, which may reach up to $750 billion over 2026 and up to $4.5 trillion by 2030 among the four largest hyperscalers, including Meta, Microsoft , Amazon , and Alphabet. Many suggest this is further
evidence of a bubble being fuelled aggressively by big tech companies
doubling down on a technology that hasn't demonstrated meaningful returns. Latest Videos From TechRadar Watch full video here:

But explaining his firm Berkshire Hathaway's 17.85 million-share purchase of Alphabet stock, disclosed in November 2025, Warren Buffett drew parallels between this level of spending and that during the 1800s to build the
railroad system. From digital to physical As an investor, Buffett famously avoided software giants, suggesting they were asset-light businesses and didn't see the value in the investment propositions. This is a point he's since conceded he was wrong about. The firm he led made an additional $10 billion investment in Alphabet in June 2026. You may like The AI boom costs more than Apollo, ISS, and the Manhattan Project combined Quote of the day by Sam Altman: "It also takes a lot of energy to train a human" Chasing every model release is a fool's errand and a fast track to AI fatigue inside your organisation: GoodData.AI CTO says businesses should focus on automation use cases over every single new release

The rationale is that there's currently a pivot underway in which these companies are shifting from the purveyors of digital products, namely applications and software, toward the physical infrastructure and compute to power AI.

Although the hyperscalers have been investing heavily in cloud infrastructure to power their software as a service (SaaS) propositions, the spending that
AI commands is on a completely different level, as the figures show. That's why, in the end, Buffett believes that Alphabet proved a sound investment given he believes that they have the cash flow to sustain the ongoing
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Link to news story: https://www.techradar.com/pro/quote-of-the-day-by-investor-warren-buffett-on-a i-capex-thats-real-money-that-kind-of-money-wasnt-even-put-in-the-railroad-bus iness-outlining-his-bullish-long-term-thesis-on-ai


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