In the days after Chinese startup DeepSeek’s breakthrough low-cost AI computing shocked the U.S. technology industry, Microsoft and Meta defended huge spending, saying it was crucial to stay competitive in new areas.
DeepSeek, with its claimed model rapid advancement can match or even surpass Western competitors, a small part of the surge in costs for the leaders we have, but senior executives say building a massive computer network is for the continual satisfaction Growing company demand is necessary.
“Massive investments in capital expenditure and infrastructure will be a strategic advantage,” Meta CEO Mark Zuckerberg said on a conference call after the tribute.
Microsoft CEO Satya Nadella said spending will reduce capacity constraints, hindering the ability of technology giants to capitalize AI.
“As AI becomes more efficient and easy to use, we will see more demand,” he said in a call with analysts.
Microsoft has allocated $80 billion (approximately Rs 693,031 crore) in the current fiscal year, while Meta has pledged as much as $65 billion (approximately Rs 563,085 crore).
That’s with about $6 million (about Rs 563,085 crore) DeepSeek said it has already spent on developing its AI model. U.S. executives and Wall Street analysts say that this is the amount spent on computing power, not all development costs.
Nevertheless, some investors seem to feel lost in patience with the massive spending and the lack of huge returns.
Microsoft’s stock is a relationship with industry leader Openai, widely seen as a leader in AI competitions – down 6% in early trading Thursday after the company said its Azure Cloud Business growth would miss out on No. 1 Estimates for the third quarter.
“We really want to start seeing a clear roadmap for this monetization model,” said Brian Mulberry, portfolio manager at Zacks Investment Management.
Meanwhile, Meta sent mixed signals on how its bets on AI-powered tools earned strong returns in the fourth quarter, but sales forecasts for the first quarter were scarce. Its stock rose more than a quarter on Thursday.
“With these huge expenses, they need to turn on the plugs in the revenue generated, but this week is a wake-up call for the United States.”
“For artificial intelligence, there is too much capital expenditure and insufficient consumption.”
There are some signs that executives aim to keep spending.
Capital expenditures in the third and fourth quarters will remain around $22.6 billion (about Rs 195.76.9 billion), which is the second quarter level, said Amy Hood, chief financial officer of Microsoft.
“In fiscal 2026, we expect to continue investing in strong demand signals. However, growth will be lower than fiscal 2025 (end in June),” she said.
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(This story has not been edited by Tech Word News’s staff and is automatically generated from the joint feed.)
