Discussing AI spending by businesses

Welcome back to Mornings on 2 and today's Dollars and Cents. A lot of attention and a lot of money is being spent on AI. How is it impacting you, me, businesses and jobs? Local financial advisor Clark Garanin joins us now this morning to talk about this. Good morning Clark. Good morning Pam. Happy Friday. Happy Friday to you. A busy one in the markets. Aside from the AI companies which we talk about a lot, those chip companies as well, what other businesses are spending a lot of time and money on AI right now? Sure, so it's really across the spectrum from the large hyperscalers all the way down to some of the small biotech companies and just the five largest hyperscalers over the past year have increased their spending 60% to over 700 billion dollars this year. So it is historic scale and really we just need to look at what these results are and we saw that yesterday with both Alphabet and Tesla's earnings calls and it's a tale of two stories. I feel like Google really proved how it's worked and they tripled their Google Cloud profit threefold whereas Tesla missed earnings and had one of its worst days in three years. So you're kind of looking at both of these saying okay well they both got hit so you're darned if you do and darned if you don't. So this really does give us a picture into what next week is going to look like with a lot of the other mag seven companies reporting earnings. Yeah that leads me right into I was going to mention that before we do really quick hyperscalers those are the the data center operators right the cloud companies and the data center just so in case people didn't know what that is right. Correct yeah so you're gonna look at Microsoft, Meta, Amazon, Google those are some of the larger hyperscalers that we're looking at that have been putting so much money towards AI and so it's clearly showing that they're committed at this point whereas if you look at the general population I think depending on what poll you look at it's about a split flip of a coin 50-50 whether people are positive or negative on AI. Talk about before we let you go those other companies coming in we're getting a good look at how companies are doing right now as those corporate earnings come in you mentioned the mag seven are the companies spending too much money on AI what are you seeing in the impact on the companies the earnings and the jobs? So earnings so far have actually done really well like for Google and so that's the hope for say Microsoft and Apple coming into next week is that they're gonna see some of that increased profit margin and increasing their profitability moving forward and we're hoping that that stays the same because that's the concern if they start to overspend and their supply constrained then if they can fix that things go well. If they're not able to fix that then we see all of this AI spending start to slow which could have a ripple effect into the economy. All right certainly a developing history and ongoing impact. Clark Garanin with CalBay Investments thank you so much for joining and your insight. Thanks Pam have a great weekend. You too. We will be right back with that opening bell we leave you with another gorgeous shot of that sunrise around the Bay Area.