Microsoft and Meta: ‘Heavy investments in AI will pay off soon’

Satya Nadella, CEO of Microsoft, and Mark Zuckerberg, CEO of Meta, are defending their hefty investments in artificial intelligence (AI), suggesting that the companies will capitalize as demand for AI applications will grow in the future.
When Chinese AI start-up DeepSeek announced last week it had only spent $6 million on developing its AI chatbot, it caused a lot of stir in both the chip sector and financial community. This is because tech companies like Microsoft, OpenAI, Google and Meta have allocated billions of dollars in developing their large language models (LLMs).
However, Microsoft and Meta say the huge investments in AI aren’t a waste of money. On the contrary, the massive spendings were necessary to stay competitive in the field.
“Investing ‘very heavily’ in capital expenditure and infrastructure is going to be a strategic advantage over time,” Meta CEO Mark Zuckerberg said on a post-earnings call this week, press agency Reuters reports.
Satya Nadella, CEO of Microsoft, argued that the spending was necessary to overcome the capacity constraints that have hampered the company’s ability to benefit from AI.
“As AI becomes more efficient and accessible, we will see exponentially more demand,” Nadella said on a call with analysts.
Microsoft tends to spend approximately $80 billion for AI in its current fiscal year. Meta has pledged to invest up to $65 billion in enlarging its AI infrastructure.
“In 2025, I expect Meta AI will be the leading assistant serving more than 1 billion people, Llama 4 will become the leading state of the art model, and we’ll build an AI engineer that will start contributing increasing amounts of code to our R&D efforts,” Zuckerberg said in a post on Threads.
Some investors seem to be losing patience with the heavy investments in AI and want to see big payoffs.
“With these huge expenses, they need to turn the spigot on in terms of revenue generated, but I think this week was a wake-up call for the US. For AI right now, there’s too much capital expenditure, not enough consumption,” Futurum Group analyst Daniel Newman told Reuters.
Microsoft and Meta feel this will change in the near future, therefore justifying their expenditures in AI.
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