Key Points
- Tech companies plan to invest over $200 billion in AI this year.
- Amazon expects to spend a record $75 billion in 2024.
- Meta plans to boost its spending to about $40 billion.
- Alphabet’s spending is above Wall Street’s predictions, with growth expected in 2025.
- Tech firms are securing energy deals and resources to build AI infrastructure.
Looma News
Three months ago, major tech companies were criticized by Wall Street for big investments in AI that didn’t pay off as expected. In response, they are planning to significantly increase their spending. The four largest companies Amazon, Microsoft, Meta, and Alphabet are set to invest over $200 billion this year, marking a record high.
Executives noted that this spending will not only continue into next year but might also grow. This reflects the huge costs tied to the AI boom sparked by the arrival of ChatGPT. Tech giants are fiercely competing to get top-notch chips and build large data centers to support AI technologies.
To reach these goals, companies have made deals with energy suppliers and even brought back a controversial nuclear plant. They are trying to assure investors that these investments will lead to higher profits compared to their current earnings from digital ads, products, and software.
On a recent call with investors, Amazon CEO Andy Jassy called AI a “once-in-a-lifetime opportunity,” backing a projection of $75 billion in spending for 2024. Analysts at MoffettNathanson described Amazon’s financial commitment as “truly staggering.”
Meta CEO Mark Zuckerberg also highlighted a future focus on AI, announcing plans to significantly increase investment in language models and other advanced projects, with expected spending of up to $40 billion this year. Meanwhile, Alphabet’s spending has exceeded market expectations, with CFO Anat Ashkenazi forecasting significant growth for 2025.
