Meta raised its capital expenditure forecast by 10 billion US dollars for this year, to 35 billion to 40 billion US dollars for the whole year; Google says it will spend about 12 billion US dollars or more on capital expenses each quarter this year; Microsoft says that capital expenditure for the most recent quarter was 14 billion US dollars, and it is expected to continue to increase “significantly.”
Some of the world's top tech companies have spent billions of dollars on the AI revolution. Now they plan to invest tens of billions more.
At this week's quarterly earnings call,$Meta Platforms (META.US)$,$Alphabet-C (GOOG.US)$und$Microsoft (MSFT.US)$They all emphasized the scale of their investment in AI. On Wednesday, Meta raised its capital expenditure forecast for this year by $10 billion, to $35 billion to $40 billion for the full year. On Thursday, Google's chief financial officer Ruth Porat said the company will spend about $12 billion or more on capital expenses each quarter this year, most of which will be used to build new data centers. Microsoft's chief financial officer Amy Hood said the company's capital expenditure for the most recent quarter was $14 billion and is expected to continue to increase “significantly.”
Judging from the quarterly results and forecasts of major technology companies so far in this financial reporting season, a company must spend 10 billion US dollars in capital expenditure every quarter to become a member of the AI field.
However, Meta's expectation of a sharp increase in AI spending stunned the market, and the stock price plummeted 10.56% in a single day. However, Zuckerberg defended the AI investment frenzy during the Meta earnings call and vowed to increase spending to make Meta “the world's leading artificial intelligence company.” Zuckerberg said he believes Meta “should substantially increase investment over the next few years to build more advanced models and the world's largest artificial intelligence service.” He added that “before we can generate significant revenue from these new products,” these expenses must “grow meaningfully.”
Google's Porat said during the conference call: “We are very committed to making the necessary investments to maintain our leading position.” Google CEO Sundar Pichai added: “This is a once in a lifetime opportunity.”
In fact, long before OpenAI released ChatGPT in the second half of 2022, tech giants had been steadily increasing their investment in AI research and development. However, the success of ChatGPT prompted big tech companies to suddenly increase capital spending. Venture capitalists are also pouring into the field, enabling startups with a small number of employees to raise hundreds of millions of dollars just by building their own AI tools.
According to media quoting a person familiar with the matter, Musk's AI startup X.AI is about to reach an agreement to raise 6 billion US dollars in a round of financing, which values the company at 18 billion US dollars. The person familiar with the matter said that investors such as Sequoia Capital will participate in this round of financing.
Editor/Somer