The AI CEOs Sounded the Alarm, But That Doesn’t Mean I’m Selling Tech.

Last week, some of the biggest names in artificial intelligence began publicly questioning whether the industry is moving too quickly. Anthropic CEO Dario Amodei called for companies to slow the pace of development as AI systems become increasingly powerful, and OpenAI CEO Sam Altman agreed that the industry needs to “pace the frontier” while putting stronger safety measures in place. Elon Musk, who has warned about AI risks for years, backed Amodei as well, while Google DeepMind co-founder Demis Hassabis said the industry was moving in the right direction by taking these concerns more seriously.

Almost immediately, investors started asking whether this was another reason to reduce exposure to technology and AI stocks. I think that reaction misses an important distinction: warning that AI is developing extraordinarily quickly is very different from saying that demand for AI is slowing or that the enormous investment being made in the technology isn’t producing results.

When I’m trying to determine whether an investment thesis has actually changed, I would rather start with what is happening inside the businesses themselves. Right now, the earnings are still telling us that demand for AI infrastructure remains extremely strong.

Nvidia is probably the clearest example. In its most recent quarter, the company generated $96.2 billion in revenue, an increase of 106% from the same period a year earlier. Its Data Center business, which sits at the center of the AI buildout, generated $89 billion, up 117% year over year.

Those numbers are especially significant when you consider the size Nvidia has already reached. Doubling revenue is impressive for a small company, but doing it when quarterly revenue is approaching $100 billion tells us something very different about the scale of demand. If the AI infrastructure boom were beginning to meaningfully deteriorate, Nvidia’s orders and revenue would be among the first places I would expect that weakness to appear.

The same pattern isn’t limited to Nvidia. Microsoft’s latest quarterly revenue reached approximately $90 billion, up 18% from the previous year, while net income increased 31% to $35.8 billion. Amazon’s AWS cloud business recently posted its strongest growth in more than four years, and Amazon has said that it still doesn’t have enough computing capacity to satisfy customer demand.

The amount of money these companies are continuing to invest reinforces that point. Amazon expects roughly $220 billion of capital spending, while Alphabet expects approximately $195 billion to $205 billion. Meta, which recently reported a 28% increase in quarterly revenue to $60.8 billion, is planning approximately $130 billion to $145 billion of capital expenditures this year as it continues expanding its AI infrastructure.

That doesn’t mean investors should ignore the risks associated with this spending. Hundreds of billions of dollars are being poured into data centers, chips and other AI infrastructure, and eventually the revenue and profits generated by AI need to justify those investments. If companies continue spending at this pace without producing corresponding growth in revenue, earnings and cash flow, that would give investors a legitimate reason to reconsider the thesis.

But that isn’t what the CEOs were warning about last week. Their concerns were largely about AI becoming more powerful very quickly and the safeguards that may be necessary as that happens. That is a very different issue from customers deciding they no longer want AI, companies cutting their AI budgets or the economics of AI suddenly deteriorating.

For investors, I think an important distinction got lost in the headlines. Amodei, Altman and Hassabis were raising concerns about the speed and safety of AI development, not saying that businesses no longer want AI, that demand for computing power is disappearing, or that the economics of AI have suddenly stopped working. Those are very different questions, and when I am deciding whether the investment case for technology has actually changed, I would rather look at what companies are earning and what their customers are spending than assume that a warning about AI safety is also a warning about AI demand.

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