Booming AI budgets appeared in danger final week when DeepSeek crashed Nvidia’s inventory based mostly on hypothesis that its cheaper AI fashions would decrease demand for AI chips and knowledge facilities.
Alphabet CEO Sundar Pichai has definitely seen the Chinese AI firm, praising its work as “tremendous” in Alphabet’s newest earnings name (whereas including that a few of Gemini’s fashions are simply as environment friendly).
But similar to Meta, Alphabet isn’t throwing down the towel in Big Tech’s AI spending wars. In its newest earnings report, Alphabet introduced it might enhance capital expenditures to $75 billion this yr — a whopping 42% improve — to speed up its AI progress.
Alphabet is betting that cheaper AI will massively enhance demand for its providers, somewhat than making it mainly free and threatening its enterprise fashions. The firm famous it stands to profit from this rise in utilization — often known as inference — due to its billions of current customers.
“Part of the reason we are so excited about the AI opportunity is we know we can drive extraordinary use cases because the cost of actually using it is going to keep coming down, which will make more use cases feasible,” Pichai stated in the course of the earnings name. “And that’s the opportunity space. It’s as big as it comes, and that’s why you’re seeing us invest to meet that moment.”
Meta CEO Mark Zuckerberg made related feedback in Meta’s earnings name final week, pledging to spend “hundreds of billions” on AI in the long run regardless of all of the DeepSeek buzz.
Whether this all pans out is unclear, however for now, tech giants can afford the AI payments, and when (or if) they’ll decelerate is anybody’s guess.
