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<\/p>\n\n Silicon Valley\u2019s mega AI spending spree isn\u2019t slowing down anytime soon. But Wall Street\u2019s patience to see a return might be wearing a little thin.\n <\/p>\n
\n That message rang clear when Meta, Microsoft, Amazon, Apple and Google parent Alphabet all said this week that they\u2019re forking over more on capital expenditures, like leases and equipment for data centers and infrastructure.\n <\/p>\n
\n Based on the way analysts grilled executives from companies like Meta, Alphabet and Google on earnings calls this week, they\u2019re eager for signs that these massive investments will pay off in a big way.\n <\/p>\n
\n Microsoft, Alphabet, Amazon and Meta all grew their overall revenue year-over-year and surpassed Wall Street\u2019s expectations. Microsoft and Google saw their cloud businesses expand by 40% and 34% respectively, while Amazon Web Services sales grew 20% year-over-year \u2013 a sign that companies are indeed relying on their services in the age of AI.\n <\/p>\n
\n And they\u2019re continuing to pour tens of billions of dollars into AI infrastructure and data centers, an investment they call necessary for the internet\u2019s next era.\n <\/p>\n
\n The dollar amounts involved are staggering.\n <\/p>\n
\n Google expects to spend $91 to $93 billion in capital expenditures for 2025, up from the $85 billion it previously forecast. Microsoft sees that spending up 74%, to $34.9 billion this year, largely lining up with the more than $30 billion it predicted for the quarter. Meta spent $19.37 billion, up from $9.2 billion a year ago and more than the $18.4 billion analysts expected.\n <\/p>\n
\n And Amazon estimates the 2025 bill will hit $125 billion \u2013 and expects to increase that in 2026.\n <\/p>\n
\n Even Apple, which is not a major cloud provider, expects to increase its capital expenditure spending related to AI investments, Apple Chief Financial Officer Kevan Parekh said on the company\u2019s Thursday earnings call.\n <\/p>\n
\n Existing data centers need to be upgraded to handle AI workloads, leading to the giant outlays, said Melissa Otto, head of research for investment research service S&P Global Visible Alpha.\n <\/p>\n
\n Tech giants justify that spending by saying demand is outstripping supply. Amazon CEO Andy Jassy said that \u201cas fast as we\u2019re adding capacity right now, we\u2019re monetizing it.\u201d\n <\/p>\n
\n But Wall Street wants more than just promises of future returns. Meta shares fell as much as 13.5% on Thursday, while Microsoft\u2019s were down more than 3%.\n <\/p>\n
\n Nearly every question on Meta\u2019s earnings call focused on how the company views its AI investments translating into income, the timeline for new products and models coming out of its Superintelligence Lab and its general approach to AI.\n <\/p>\n
\n Zuckerberg called AI useful for powering virtual assistants and helping advertisers plan their campaigns. More than a billion people use Meta AI on a monthly basis, he said, adding that AI can lead to \u201call kinds of new products around different content formats.\u201d\n <\/p>\n
\n \u201cWe expect to build novel models and novel products, and I\u2019m excited to share more when we have it,\u201d he said about the Superintelligence Lab\u2019s efforts.\n <\/p>\n
\n On the Microsoft call, analysts wanted to know if clients will make good on promised purchasing commitments and whether the tech industry can really make money from global AI investments. Amy Hood, Microsoft\u2019s chief financial officer, said its investments reflect business that\u2019s already been booked, saying that demand is increasing.\n <\/p>\n
<\/p>\n
\n Google investors wanted to know how AI summaries and agents are changing how the company makes money from search. Google\u2019s chief business officer said the company makes about the same money from ads below and within the AI responses as with traditional search.\n <\/p>\n
\n The answers satisfied some analysts; UBS said it maintains its \u201cconviction that AI-related stocks should drive further equity performance,\u201d while CFRA Research said it came away from the quarter \u201cmore optimistic\u201d about Google\u2019s core business and that Meta \u201cremains committed to becoming the leading AI lab.\u201d Wedbush Securities\u2019 Dan Ives said Microsoft is \u201chitting its next phase of monetization on the AI front.\u201d\n <\/p>\n
\n But that\u2019s as long as they keep growing the products that catapulted them to become the world\u2019s largest tech companies in the first place. Investors are more likely to raise their eyebrows at all this spending if customers start shying away from Meta\u2019s social media apps or Google\u2019s search engine, according to Otto.\n <\/p>\n
\n \u201cYou\u2019re seeing a pressure to accelerate innovation,\u201d said SuRo Capital\u2019s Evan Schlossman. \u201cYou have new space in AI that people believe will be extremely valuable, and so there is a rush to sort of fill that void.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"Silicon Valley\u2019s mega AI spending spree isn\u2019t slowing down anytime soon. But Wall Street\u2019s patience to see a…\n","protected":false},"author":2,"featured_media":265016,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,74],"class_list":{"0":"post-265015","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/265015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=265015"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/265015\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/265016"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=265015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=265015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=265015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}