When AI's Spending Arms Race Hits an Economic Wall

The article exposes a critical vulnerability in the AI industry's economics: large tech companies deliberately engage in capex wars not to win, but to force smaller rivals like Anthropic and OpenAI into unsustainable funding cycles. With converging pressures—energy costs at multi-year highs, restricted access to Gulf capital, threatened rate hikes, and RAM price crashes—AI labs face a reckoning where venture capital dries up and they must pass the true cost of models to users, challenging the entire venture-funded growth model.