IT Essentials: Addicted to scale

Tech is turning its back on profits in favour of relentless growth

In the absence of AI profits, tech firms are retreating to what they know best – growth, growth and more growth.

Last week I highlighted a really excellent piece of investigative journalism by The Verge’s Elizabeth Lopatto. She argued that datacentre operator CoreWeave, on the face of it a massive success story, is actually a ticking time bomb that could foreshadow the crippling of the entire AI industry if the technology doesn’t continue its rapid expansion.

Perhaps that’s why Google this week said it “must” double its compute capacity every six months. It was sold as a way to compete with rivals, but it’s now obvious (and well reported) that AI really isn’t making anyone any money except Nvidia. What does every tech company do in that situation? They try to grow faster than everyone else, of course.

That reaction is built into Silicon Valley’s VC-led DNA. Many aspiring tech giants got their start by ploughing investors’ money into scale to muscle out the competition, trusting profits would come later – often much later (Uber didn’t turn a profit until last year, 15 years after it was founded).

So, it’s only natural for the industry, when threatened, to retreat to what it knows and does best: grow, baby, grow, and damn anyone who questions the decision.

Google, to be fair, has a higher chance of succeeding in AI than most, but only by copying Nvidia: as a supplier of hardware, not software. Rumours are circulating that Meta is considering using Google’s TPUs in its datacentres instead of Nvidia’s GPUs.

That’s undoubtedly good for customers – another chip supplier at Google’s scale would break Nvidia’s effective monopoly and lower prices, as well as cushioning the sector if the AI bubble does burst – but is a damning indicator that nobody is still making any money from AI itself.

Like other AI firms, OpenAI - the technology's poster child - remains deeply in debt to its investors. Still, the company is at the forefront of the artificial intelligence movement. I talked about AI coding, agents and the future with OpenAI’s EU developer lead and founding member of the developer experience team, Katia Gil Guzman, in the latest episode of Ctrl Alt Lead.

It’s late November, and that means it’s time for Christmas shopping – but rather than novelty Lego and sunrise alarm clocks, we’ve put together a gift guide focused on the modern IT leader’s needs. Expect plenty of recommendations to enable working on the go while also staying safe – and, yes, the Switch 2 is in there as well. Hey, it’s portable.

Bugs are the bane of most of our existence, but the Kent Wildlife Trust has the opposite problem: it’s worried about their decline. Penny Horwood talked to senior leaders about how the organisation is using automation and citizen science to generate actionable ecological intelligence for governments, partners and conservationists.

Supply chain security should always be at the top of mind - especially after this year's spate of attacks - and security director Deborah Saffer, of Liberty Specialty Markets, spoke about the art and science of third-party due diligence at ISC2 Secure London. We’ve got full coverage.

Finally, we held the annual Women in Tech Excellence Awards again this week - glittering, joyful and bursting with inspiration. Here are all the inspirational women making their mark on the UK’s tech sector.