S4 Capital PLC

Sir Martin Sorrell, founder and executive chairman of S4Capital, told Yahoo Finance that AI's real impact on advertising lies in media planning and buying rather than creative, and that the market is increasingly concentrated among a handful of platforms. Digital now accounts for 75% of total advertising spend of 1.2 trillion, Sorrell said, and this year spend will be about 1.35 trillion, with digital crossing 1 trillion for the first time. He put Google at 350 billion, Meta at 250 billion, Amazon at around 80-85 billion of ad revenues, and TikTok outside China at about 60 billion, meaning those four platforms alone are more than half the market and more than two-thirds of digital, a segment growing by 15 to 20%. Sorrell said the top four hyperscalers — Microsoft, Alphabet, Meta and Amazon — are each going to spend a trillion dollars a year for the next five years, at least 5 trillion in total, and that this year going into Q2 the anticipated CAPEX by those four hyperscalers was about 630 million, rising after Q2 to about 830, with next year's forecast at 1.1 trillion, of which they will have to find 530 billion in debt. He noted that Q2 was the first quarter in which Meta and Google went cash flow negative, creating a very different, more leveraged and capital-heavy world in which the hyperscalers are spending to entrench their positions.