Platformonomics TGIF is a weekly roll-up of links, comments on those links, and perhaps a little too much tugging on my favorite threads.
Get Platformonomics Updates By Email
Service resumed!
News
Google CAPEX – Q2 2026
A good start! (Though Wall Street seems to disagree).
Google CFO commentary:
CapEx was $44.9 billion in the second quarter, with the vast majority of the spend in technical infrastructure to support our investments in AI. Approximately 60% of our investment in technical infrastructure this quarter was in servers, and 40% was in data centers and networking equipment.
We had negative free cash flow of $5.9 billion in the second quarter, driven by our investments in CapEx.Free cash flow was $53.3 billion for the trailing 12 months.
Moving to investments, we are updating our full year 2026 CapEx guidance range to $195‑205 billion, up from our previous estimate of $180‑190 billion. The increase in the range is primarily due to an acceleration in the delivery of capacity to meet growing demand.
As we previously shared, we continue to expect our CapEx to increase significantly in 2027, and we’ll provide more details at a later date.
Full analysis after all the hypers report their CAPEX.
ClownWatch™: IBM Q2 2026
One of the perils of being a meme stock is you still have to report earnings four times a year. With actual financials from a mediocre business, unbuoyed for a day by hopes and dreams of quantum computing, you can lose a quarter of your valuation.
IBM is now trading below its price in 2013 when I said they’d miss the cloud transition. Despite their “clear strategy to lead in the era of hybrid cloud and AI”, they’re missing the AI transition as well. On this path, I’ll get to do a post about another lost decade at IBM, and maybe even recount a private equity dissection.
The tell was clear over a decade ago. In 2013 IBM spent over $4 billion on CAPEX. This quarter they spent $229 million (not a typo). That is about 11 hours of Google’s spend this quarter. But sure, tell us about your leadership in cloud and/or AI…
IBM’s profit pool remains the mainframe, however much they polish up the offshore outsourcing body shop and the acquisition treadmill of lost software toys. Courting quantum meme stock aficionados is no doubt fun, but doesn’t pay the bills.
Another peril of being a quantum meme stock arises when you need to at least hedge your fundamental quantum approach.
Previous:
ClownWatch™: IBM Q4 2025, ClownWatch™: IBM Q3 2025, Are Markets Efficient?: IBM Edition, Godwin’s Law for AI: Curing Cancer, The Mainframe is the Solution! What Was the Question?, ClownWatch™: IBM Q4 2024, ClownWatch™: IBM Reports Negative CAPEX, Follow the CAPEX: The Clown Car Race Checkered Flag, Introducing Platformonomics ClownWatch™, IBM is Not a Technology Company: Employees Agree, IBM is Not a Technology Company: Layoffs Are Their Specialty, IBM is Not a Technology Company: But Ecstatic to be Treated Like One, IBM is Not a Technology Company: McDonald’s Edition,
Who Doesn’t Have a Model Router?
Cursor, Meta, Ramp, Runway, and Stripe, amongst others, were talking about model routers this week. Conspicuously missing are more traditional middleware providers for whom this should be their bread and butter. Perhaps they are asleep at the switch…
The classic middleware pattern is playing out here. Pretty much every enterprise is building some kind of router or orchestration layer to manage their AI model consumption. It is an essential enterprise control point for preserving optionality, vendor leverage, controlling spend, and protecting against geopolitical bolts from the blue. And there are so many other capabilities to attach to this control point. Application level routing is not enough. It should be a product.
Previous:
Never Take a Dependency on Elon Musk: Stealing Your Code Edition
That is one way to get after that $22.7 trillion in enterprise TAM…
Previous:
Never Take a Dependency on Elon Musk, You Took a Dependency on Elon Musk, Space (Twitter IPO Index) Jam, Jammed, Space Twitter: A Boon for Direct Indexing?, Never Take a Dependency on Elon Musk: Space Twitter S-1 Edition, The Price-to-Elon Ratio, Follow the CAPEX: Space Twitter, Never Take a Dependency on Elon Musk, I was beaten to dubbing it Space Twitter, The great Matt Levine on Space Twitter
Quick(er) Hits
Data about the actual impact of data centers exists. You wouldn’t know it from the public discussion. In a world of insufficient data center capacity, rationing can start with the advocates of bans and moratoria.
Hipster Economic Development? Former FTC chair and hipster antitrust stalwart Lina Khan was named head of economic development for New York City. You can love small businesses and believe the best way to create small businesses is to start with large businesses…
Not sure which would be worse as Seahawks ownership, owners of the San Francisco 49ers or private equity, but the new ownership group looks like it will include both.
Speaking of sports franchises managed financially, voice of the Portland Trailblazers Kevin Calabro rejects a new contract offer as “subprime“, an apt dig at subprime car loan purveyor and billionaire owner Tom Dundon.