AI Boom Fuels Tech Giants’ Growth
The latest earnings reports from Microsoft, Meta, and IBM have one thing in common: artificial intelligence is driving their success. Despite concerns about infrastructure investments, these tech giants are confident that AI will continue to contribute significantly to their revenue.
Microsoft and Meta Stand by Aggressive Spending Plans
Microsoft and Meta, which plan to invest nearly $150 billion in infrastructure in 2025, are undeterred by recent market jitters. They believe that Chinese start-up DeepSeek’s cost-efficient AI model will ultimately benefit their businesses. In fact, Microsoft’s AI revenue run rate hit $13 billion in the quarter, exceeding expectations.
Meta’s AI-Powered Advantage+ Service Sees 70% Growth
Meta’s quarterly revenue and earnings surpassed analysts’ expectations, thanks in part to the success of its AI-powered Advantage+ marketing service. The service grew 70% in the fourth quarter, with Meta AI reaching 700 million monthly active users.
IBM Books Nearly $2 Billion in AI Business
IBM CEO Arvind Krishna announced that the company booked nearly $2 billion of AI business in the final quarter of 2024, accounting for about 40% of the $5 billion booked since inception.
Tech Executives Defend AI Investments
Microsoft CFO Amy Hood and Meta CEO Mark Zuckerberg defended their companies’ massive AI investments, which could total $80 billion and $65 billion, respectively, this year. They believe that investing heavily in infrastructure will give them a strategic advantage over time.
DeepSeek’s Efficiency Sparks Optimism
Despite initial market concerns, tech executives are optimistic about DeepSeek’s AI model, which reportedly performs as well as leading U.S. models at a fraction of the cost. Microsoft’s Satya Nadella and Meta’s Mark Zuckerberg praised DeepSeek’s innovations, saying they will benefit their firms and fuel the development of AI applications.
SoftBank Eyes $25 Billion Investment in OpenAI
In a sign of confidence in the future of America’s AI leaders, Japanese tech investor Softbank is reportedly in talks to invest up to $25 billion in OpenAI, making it the ChatGPT-maker’s largest investor.
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