Gavin Baker Defends Big Tech's AI Spending Spree

Speaking on the Invest Like The Best podcast, Baker pointed to a 25% year-over-year rise in Meta’s net cash from operating activities as proof that these businesses are already seeing significant financial acceleration. He suggests that the market is misreading the current data because much of the existing compute capacity remains locked into older, lower-priced contracts.

As these legacy agreements expire, cloud providers will likely realize higher margins, correcting the current disconnect between capital expenditure and revenue. Baker also noted that GPU prices continue to climb, a trend he claims would not persist if demand for AI computing were cooling. For now, he believes the market is underestimating the value of the infrastructure already in place.