Artificial Intelligence: The High Investment Appetite of Tech Giants

Artificial Intelligence (AI) has the potential to fundamentally change our everyday experience—to an extent that even experts can hardly assess at the moment. However, to benefit from these advancements, substantial investments are necessary. In the corporate world, these investments fall under so-called capital expenditures or Capex. A study conducted by Bloomberg Professional Services suggests that tech giants like Microsoft, Amazon Web Services, and Google's parent company Alphabet could increase their capital expenditures to a total of about 200 billion dollars by 2025. This increase in spending is primarily due to the growing demand for generative AI, which in turn requires investments in data centers and new products. According to Bloomberg's analysis, more than 90 billion dollars could be additionally invested in building generative AI infrastructure in 2024-2025 compared to 2023. These investments are aimed at promoting the use of cloud services, AI copilots, and the licensing of large language models in the medium term, even if it might take 2-3 years for these to yield financial results. Mark Zuckerberg, CEO of Meta Platforms, also sees significant investment needs in AI infrastructure. At the recent Q3 earnings conference, he emphasized the importance of focusing on AI developments to advance the core business with strong ROI. He plans to invest significantly in the necessary infrastructure, even though the final budget is still unclear. Meta is currently experiencing strong product and business growth. Parts of Meta's long-term vision for AI and the future of computing are becoming increasingly clear, with the acceptance of Meta AI and Llama steadily rising. According to Zuckerberg, more than 3.2 billion people now use at least one of the company's apps daily.