Author | Lightnews

Shivang Kandoi @shivangkandoi.bsky.social · 8h

And their response?

SPEND MORE.

Tomorrow (Day 3): I'll show you the CEO quotes that admit this isn't working.

Zuckerberg, Nadella, and Jassy all said things in earnings calls that contradict their "everything is fine" narrative.

You need to hear what they ACTUALLY said.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

WHAT THIS MEANS

We're watching:

• Meta burn $73B on products nobody wants
• Microsoft take quarterly losses on OpenAI
• OpenAI restructure to for-profit just to raise more cash
• AWS margins collapse 6.6 points in one quarter
• Google spend 26x more than they profit from AI

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Instead, Meta spent it on:
• Quest VR headsets (sales declining)
• Horizon Worlds metaverse (abandoned by users)
• Ray-Ban smart glasses (modest traction)

Mark Zuckerberg's net worth: $200B

He personally could afford this loss.

But shareholders? They just watched $220B in market cap vanish.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

LET'S PUT $73 BILLION IN PERSPECTIVE

Meta Reality Labs cumulative losses: $73.04 billion

What else could $73B buy?

• NASA's annual budget for 14 years
• 3 full Mars missions with humans
• 73,000 schools built in developing countries
• Universal basic income for 1 million people for 6 years

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Wall Street Journal reported: Software companies adding AI are seeing margin compression across the board.

This isn't just Big Tech's problem.

This is an INDUSTRY-WIDE profitability crisis.

Nobody is making money on AI except NVIDIA.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

OpenAI: Raised prices on enterprise customers mid-contract

Anthropic: Lost $5.3B in 2024

The "Subprime AI Crisis": AI model providers (OpenAI, Anthropic) having to charge MORE while customers demand LESS expensive solutions.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

THE COLLATERAL DAMAGE

It's not just Big Tech losing money.

EVERY company adding AI is bleeding:

Notion (AI features): Ate 10% of profit margins just to provide "generate stuff, search, meeting notes"

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Why keep raising?

Because the projects keep costing more than expected.

And they can't stop now—they're committed.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Search advertising: $56.6 BILLION quarterly revenue

Google is using their profitable search monopoly to subsidize money-losing AI bets.

CEO Sundar Pichai raised capex guidance TWICE in 3 months:
• July: $75B → $85B (+$10B)
• October: $85B → $91-93B (+$6-8B)

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

GOOGLE'S SPENDING SPIRAL

Here's Google's Q3 2025 in numbers:

Cloud division profit: $3.59 billion
Total 2025 capex: $91-93 billion

Cloud profit covers: 3.8% of their AI infrastructure spending.

Where's the rest of the money coming from?

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

But if they can't keep CURRENT infrastructure running... what happens when they double it?

This outage wasn't a glitch. It was a warning.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Cause? Infrastructure strain from rapid AI scaling.

They're building data centers so fast they can't keep them stable.

Amazon's 2025 capex: $125 BILLION (raised from $100B mid-year)

They're doubling data center capacity in next 2 years.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

AWS OCTOBER 21 OUTAGE: THE CANARY IN THE COAL MINE

October 21, 2025: AWS US-East-1 region crashed

Services affected:
• EC2 (compute)
• RDS (databases)
• Lambda (serverless)
• S3 (storage)

Impact: Global. Thousands of websites and apps went dark.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Why?
• Flooding infrastructure with AI GPUs
• Price wars with Microsoft Azure and Google Cloud
• Cutting prices to win contracts
• Burning margin to maintain growth

CFO Brian Olsavsky's excuse: "Seasonal stock comp, foreign exchange, and higher depreciation from AI investments"
And it gets worse..

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

AMAZON AWS: THE MARGIN DEATH SPIRAL

Let me show you something terrifying:

AWS Operating Margin by Quarter (2025):

Q1 2025: 39.5%
Q2 2025: 32.9%

That's a 6.6 percentage point collapse in THREE MONTHS.

What happened?

Operating expenses exploded: $20.7B (up from $16.9B YoY)

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

They restructured to for-profit to raise capital because their nonprofit status was blocking investor returns.

Translation: We abandoned our mission to save humanity so we could keep the money printer running.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Why did they restructure?

Because they're LOSING MONEY FASTER THAN THEY CAN RAISE IT:

2024 losses: -$5 billion
2025 expected losses: -$8 to $15 billion (estimates vary wildly)
Compute costs: $15B+ annually
Salary burn: $3B+ annually

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

OPENAI'S RESTRUCTURING TELLS THE WHOLE STORY

October 29, 2025: OpenAI announced completion of corporate restructuring

What changed:
• Nonprofit foundation (OpenAI Foundation) now controls everything
• For-profit subsidiary (OpenAI Group) now structured as Public Benefit Corporation

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

The commitment breakdown:
• $13B total committed
• $11.6B already invested (by Sept 2025)
• $135B stake valuation (27% ownership)
• $250B NEW Azure services contract over next 4 years

CEO Satya Nadella's spin: "We've seen 10 times the return on our OpenAI investment"

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

MICROSOFT'S $3.1B QUARTERLY NIGHTMARE

Microsoft Q1 FY2026 (ended Sept 30, 2025):

Net income reduction: -$3.1 BILLION

Cause? "Equity method investment" in OpenAI

Translation: OpenAI's losses are so massive they're dragging Microsoft's profit down.

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

CEO Mark Zuckerberg's response: "We need to invest in ramping up production" of AI glasses.

Analyst Mike Proulx (Forrester): "Reality Labs is a leaky bucket. I predict Meta will shutter its metaverse projects by end of year."

Wall Street is screaming "STOP." Meta is responding "INVEST MORE."

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

THE MARKET'S VERDICT ON META

October 29, 2025, after earnings:

Stock price: DOWN 9% after-hours
Market cap wiped out: $220 BILLION

Why such a brutal reaction?

Because CFO Susan Li raised 2026 total expense guidance to $116-118 billion (from prior $114-118B outlook).

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

CEO Mark Zuckerberg's response: "We need to invest in ramping up production" of AI glasses.

Analyst Mike Proulx (Forrester): "Reality Labs is a leaky bucket. I predict Meta will shutter its metaverse projects by end of year."

Wall Street is screaming "STOP." Meta is responding "INVEST MORE."

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

THE MARKET'S VERDICT ON META

October 29, 2025, after earnings:

Stock price: DOWN 9% after-hours
Market cap wiped out: $220 BILLION

Why such a brutal reaction?

Because CFO Susan Li raised 2026 total expense guidance to $116-118 billion (from prior $114-118B outlook).

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Shivang Kandoi @shivangkandoi.bsky.social · 8h

Total for 9 months: -$13.13 BILLION in losses on $1.25B in revenue.

That's a 10.5:1 loss-to-revenue ratio.

For every dollar they make, they lose ten.

And the worst part? Q4 2025 revenue expected to be LOWER because no new headset is launching.

Translation: The losses continue, the revenue drops.

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