Meta and Alphabet are ramping up their investments in artificial intelligence, despite recent disruptions in the market caused by DeepSeek. Meta CEO Mark Zuckerberg has announced plans to spend "hundreds of billions" on AI over the long term. Meanwhile, Alphabet is increasing its capital expenditures by 42% to $75 billion this year to accelerate its AI progress. This comes as DeepSeek's cheaper AI models dampen the demand for AI chips and data centers, causing a stir in the industry.
DeepSeek's emergence has notably impacted Nvidia's stock, due to speculation about its potential to alter AI demand. Alphabet CEO Sundar Pichai has acknowledged DeepSeek's impressive work, describing it as "tremendous." He further noted that some of Alphabet's Gemini models match DeepSeek's efficiency. Despite the competition, Alphabet remains optimistic about the growth in AI usage, known as inference, which benefits from its vast existing user base.
"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," – Sundar Pichai
Alphabet bets on the notion that cheaper AI will enhance demand for its services rather than render them obsolete. The company anticipates that the rise in AI adoption will increase reliance on its platforms, strengthening its business model rather than threatening it. Pichai emphasized the scale of opportunity presented by AI advancements.
"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." – Sundar Pichai
While tech giants like Meta and Alphabet currently possess the financial bandwidth to continue AI investments, questions remain about when and if this spending spree will slow down. With billions of users already integrated into its ecosystem, Alphabet stands poised to capitalize on the anticipated surge in AI applications.
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