Big Tech isn’t backing down from its great AI saving
- Tech companies made an appearance to justify their significant AI investments during the most recent earnings calls.
- This year, both Meta and Microsoft intend to spend more than$ 60 billion on developing AI infrastructure.
- relatively cheaper AI type has raised questions.
Even though DeepSeek may include spooked investors at the start of the month, tech giants are double down on their plans to invest heavily in AI.
, Microsoft, , and more described earnings on Wednesday and Thursday. One of the main subjects on the minds of some people was whether executives from Chinese companies ‘ seemingly less expensive AI business models would change US corporations ‘ lofty spending objectives.
The response appeared to be a clear nothing.
“ Great year for Big Tech profits as Zuckerberg, Nadella, Cook, and Musk doubled down on their AI fantasies and what this means for each of these software greats looking ahead”, Dan Ives, managing director at Wedbush Securities, said in an X article, referring to Meta’s Mark Zuckerberg, Microsoft’s Satya Nadella, Apple’s Tim Cook, and Tesla and xAI’s Elon Musk.
” This is an AI arms race and the Temu of AI DeepSeek not changing that…A I Revolution just starting”, Ives continued.
Investors had been asking whether a less expensive open-source AI type like DeepSeek’s R1 do reveal that Big Tech companies had spent too much on developing out infrastructure, such as expensive chips, or that less expensive models may prevent them from having to charge customers the same amount for access to them.
But, Big Tech stuck with its saving strategies. , for example, said it’s still planning for$ 60 billion to$ 65 billion in capex for its AI strategy in 2025. According to CEO Mark Zuckerberg, “investing forcefully” in these efforts will be the determining factor in ‘s financial direction over the coming decades.
also stated to investors that the demand for AI is so great that it is finding it difficult to provide enough information centers.
” Already, our AI business has surpassed an annual revenue run rate of$ 13 billion, up 175 % year-over-year”, Microsoft CEO Satya Nadella said on the FY 2025 Q2 earnings call.
This fiscal year, the company intends to spend$ 80 billion on AI data centers.
Some businesses claimed that less expensive AI models may increase demand and justify their investment in chips and data centers.
Zuckerberg informed buyers that Meta is working to establish an” American common” for open-source models everywhere as they become more visible.
On the Wednesday call, Zuck said,” If something, some of the recent news has only strengthened our conviction that this is the right thing for us to be focused on.”
In January, debuted a new AI model that its researchers claimed was less expensive than the$ 6 million that US tech companies are investing in. Shares of several companies, including Microsoft and Alphabet, fell on fears that a cheaper model showed they might have been overspending.
Tim Cook, the CEO of Apple, has received criticism for launching Apple Intelligence after than competition and for being more careful. That meant the business was shielded from the negative effects that other securities experienced before Thursday’s visit.
While he didn’t explain how much the phone manufacturer plans to spend on AI this year, Cook said,” From a CapEx point of view, we’ve always taken a very prudent, legislative approach to our costs”.
Over at CEO Elon Musk was all about real-world AI during the Q4 earnings call on Wednesday. Musk told analysts he’s “making rapid progress” on technology when asked about accelerating innovation.
He avoided discussing DeepSeek, but he did state that Tesla’s efforts to create its humanoid robot, Optimus, are “dramatically decreasing with time.”