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Big Tech AI boom threatened by server depreciation assumptions
A Reuters Breakingviews column published on Oct 29 highlights how the useful‑life accounting assumption for data‑center servers can affect profits of major AI investors. Amazon will shorten the useful life of certain servers from six to five years starting Jan 1 2025, adding $1.4 billion in depreciation and cutting net income by $1 billion. Meta will extend its server life to 5.5 years, reducing depreciation by $2.92 billion and boosting net income by $2.59 billion. Alphabet and Microsoft keep their current assumptions. The column estimates that if all four firms reduced server life by one year, combined net income could drop about $36 billion in 2027, implying a market‑cap impact of roughly $800 billion.