Not disagreeing with your overall point, but they can and do fudge the numbers to some extent with reporting tricks.
Like, you don’t want the public to know how terrible the AI business is? Merge it with the profitable cloud business internally and just report the numbers as a single line item. Overall the numbers are still correct, but you can hide unprofitable stuff inside larger, profitable stuff.
Or you suddenly increase the depreciation of GPUs from 3 years to 6 years, even though they wont actually last that long, to hide/spread out the huge investments you made.
Oh absolutely, the rabbit hole of deception can just go a lot deeper when people don’t even have to report numbers at all.
Like, they can fudge line items, but, if the line items are growing at the same rate after they merge them, then it’s pretty clear the new thing isn’t driving growth. And changes like that are visible and can be scrutinized as well.
Oh absolutely, you can only do this so long, and you can still see it if you look closely, but is seems that many investors forgot how to look closely?
Microsoft specifically had 13 billion capex on AI in January 2025, the last time they mentioned it separately. And like 75-100 billion revenue from cloud iirc, which was growing a lot because of AI financing shenanigans. So that could still hide the growing expenses at that point.
Not disagreeing with your overall point, but they can and do fudge the numbers to some extent with reporting tricks.
Like, you don’t want the public to know how terrible the AI business is? Merge it with the profitable cloud business internally and just report the numbers as a single line item. Overall the numbers are still correct, but you can hide unprofitable stuff inside larger, profitable stuff.
Or you suddenly increase the depreciation of GPUs from 3 years to 6 years, even though they wont actually last that long, to hide/spread out the huge investments you made.
Oh absolutely, the rabbit hole of deception can just go a lot deeper when people don’t even have to report numbers at all.
Like, they can fudge line items, but, if the line items are growing at the same rate after they merge them, then it’s pretty clear the new thing isn’t driving growth. And changes like that are visible and can be scrutinized as well.
We can watch the hands on this kind of reporting.
Oh absolutely, you can only do this so long, and you can still see it if you look closely, but is seems that many investors forgot how to look closely?
Microsoft specifically had 13 billion capex on AI in January 2025, the last time they mentioned it separately. And like 75-100 billion revenue from cloud iirc, which was growing a lot because of AI financing shenanigans. So that could still hide the growing expenses at that point.