4 Must-Knows in AI

STATE OF THE ART

The AI Industry’s State in 4 Parts

Today, we are looking at four overlooked insights that better explain the real state of AI.

Specifically, we will be looking at the following:

AI Adoption, truth or myth? A more detailed look at AI spending, the thermometer of AI hype, and while incumbents claim incredible demand, client data tells a different story.

What nobody is saying about China’s accelerator progress. China’s latest chip developments, chips vs systems, Thorium-based molten-salt nuclear reactors and why the obsession with ‘the chip gap’ proves most analysts are clueless.

The Rebirth of Nuclear. Why a massive electricity event last week will change AI’s energy future.

An honest look at the real progress of the ‘I’ in ‘AI,’ helping us cut through the noise.

Leave if you only care about the headlines. Stay if you want to understand the real state of the industry.

Let’s dive in.

AI Spending & Adoption. Truth or Myth?

This week, the remaining four Big Tech companies had their quarterly earnings days, during which they presented their financial results over the last three months, and the results have been overwhelmingly positive.

But the question here is: what about AI spending?

Hyperscalers Continue to Hyperscale

Let’s look at the five main AI spenders.

Amazon (AWS) led the pack, reporting a substantial $25 billion in CapEx for Q4 2024, driven primarily by AI and AWS cloud infrastructure, a striking 67% year-over-year increase.

Microsoft (Azure) followed closely, reporting CapEx of $21.4 billion in Q1 2025, representing a 53% year-over-year increase.

Alphabet (Google Cloud) also increased CapEx substantially, jumping to $17.2 billion in Q1 2025. Alphabet also maintained guidance of around $75 billion for 2025—willingness to spend that number,

Meta (Facebook) similarly surged its investment, reaching a record $13.69 billion in CapEx during Q1 2025. It also maintained its guidance for the year at $72 billion.

Oracle, while not spending nearly as much as its Hyperscaler friends ($2.6 billion), had the most ambitious guidance in last month’s earnings report, claiming that it intended to double AI CapEx to $16 billion, double what it spent in 2024.

Now, not all that spending is AI-focused. Still, non-AI investments are almost a rounding error, even though many of these companies try to prevent jumpscares by claiming that much of this CapEx is oriented on supporting their cash cow businesses.

But how have these companies justified such huge spending figures?

The common pattern has been, using Safra Catz’s, Oracle’s CEO, words, that demand is “dramatically outstripping supply.”

Simply put, they are investing in compute because they cannot meet current demand levels for their AI products and services. If we take these claims at face value, AI products and services should be experiencing a Cambrian adoption explosion.

But is that the case? Well…

At first, there are several reasons to believe this claim:

Amazon powers Anthropic’s demand for the company’s AI models. It’s also integrating Claude into Alexa, it’s smarthome product going by the name of Alexa+, meaning…

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