How Big Tech’s Earnings Are Inflated by Other Tech Companies | SpinGraph: Efficiency framing
SpinGraph analysis of WSJ Banking / Fintech's How Big Tech’s Earnings Are Inflated by Other Tech Companies story: efficiency framing, The Cushion + The Fog, Sp…
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How Big Tech’s Earnings Are Inflated by Other Tech Companies - WSJ
inter-tech revenue, earnings circularity, cloud concentration
Big Tech earnings growth is partially driven by sales to other tech companies, not diversified end markets. Cloud and AI infrastructure revenue streams are increasingly intra-tech, raising questions about sustainability and real-world adoption. This inter-firm revenue inflates headline metrics like YoY growth and operating margins without corresponding expansion into non-tech sectors.
Emphasizes operational logic and market efficiency while minimizing concentration risk, accounting opacity, and the absence of real-world (non-tech) validation for claimed AI/cloud utility.
Tech earnings reflect rational sectoral evolution, not artificial inflation.
Big Tech earnings are inflated by sales to other tech companies, creating circular growth.
GAAP treatment of intercompany revenue; audit committee disclosures on revenue concentration; comparisons to pre-cloud era tech revenue diversification
Combines analyst anonymity (Fog) with efficiency language (Cushion) to normalize concentration; the claim feels larger than warranted because 'efficiency' implies inevitability and virtue, while validation is limited to unnamed sources and lacks comparative benchmarks against non-tech adoption rates or margin differentials.
A substantial portion of Big Tech cloud and AI infrastructure revenue comes from other technology companies, not diversified enterprise or consumer end markets.
Citing unnamed analysts estimating share of hyperscaler cloud revenue derived from fellow tech companies
Extracted statistics from the source narrative