Blain’s Morning Porridge 23rd July 2026 “There is only one thing worse than having too little money, and that is having too much.”It’s a wake up and smell the coffee sort of morning in the AI markets. AI is here to stay. Everyone is using it. Why are prices tanking? It’s about competition, adoption and data sovereignty. Maybe it’s time for a rethink? How did it get so huge so fast? That’s a question about overly cheap liquidity and speculation, which is why Tesla’s numbers are so interesting. Yesterday Google confirmed the pace of its AI infrastructure spend will increase to $205 bln dollars next year. Second quarter income hit $112 bln, but it’s eaten into free-cash flow to the tune of negative $6bln while raising more debt, to “capitalise on the AI opportunity,” said the CFO. Exactly what is that opportunity?The other hyperscalers will say much the same thing when they report on Thursday next week. Collectively the four hyperscalers are expected to spend upwards of three-quarters of a trillion dollars next year on data centres, networks, energy, water and chips. The rest of the AI sector reports next month, when we’ll learn more about adoption and the picks and shovels of the current investment Klondike. Collectively they are taking so much liquidity out the capital markets bond analysts believe the scale of the AI build-out underlies the current steepness of the US yield curve – the AI spend is “crowding out” the US government. It is the biggest private investment programme in global history.But suddenly it feels a little wobbly. What comes next in AI?You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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