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As Alphabet
returns to the debt market to fund its artificial intelligence buildout, the company is acknowledging new risks tied to the rise of AI and its hefty investments in infrastructure.
In its annual financial report late last week, the Google parent highlighted the potential impact of AI on the company’s core advertising business and the possibility of ending up with “excess capacity” from its costly commitments.
“To meet the compute capacity demands of AI training and inference, as well as traditional cloud computing services, we are entering into significant leasing arrangements with third party operators, which may increase costs and operational complexity,” the company stated in the filing with the SEC. Large commercial agreements could also increase “liabilities and obligations in the event of nonperformance by us, our counterparties, or vendors,” Alphabet said.
