US tech giants \u2013 Google, Amazon, Microsoft and Meta \u2013 have sharply increased their capital expenditure since the start of the AI boom in 2023. The companies are investing hundreds of billions of dollars in data centres, cutting-edge chips and energy infrastructure, anticipating long-term returns from the technology.<\/p>\n
The scale of these investments demonstrates just how rapidly the technology sector has changed under the influence of artificial intelligence. Companies that previously relied mainly on software and digital services are now actively investing in physical infrastructure \u2013 from data centres to power generation facilities.<\/p>\n
\u201cThere are virtually no signs that the growth in capital expenditure will stop,\u201d noted RBC Capital analyst Rishi Jaluria.<\/p>\n
Investors expect companies to strike a balance between large-scale investments in artificial intelligence and maintaining the profitability of their core businesses.<\/p>\n
This year alone, tech giants plan to spend a combined total of around $745 billion on capital expenditure.<\/p>\n
The bulk of the funds will be channelled into the construction and expansion of data centres, the procurement of state-of-the-art chips, and powering the new infrastructure.<\/p>\n
However, the large-scale race for AI has already impacted global supply chains. Rising demand for infrastructure has led to shortages of certain memory chips and increased costs for companies.<\/p>\n
This has even affected Apple, which is not playing such an active role in the race for artificial intelligence. The company warned of pressure on sales and margins due to rising costs, which led to a 6.3 per cent fall in its share price on Thursday.<\/p>\n
At the same time, the financial results of the largest technology companies have shown that investment in AI is already beginning to generate additional revenue, particularly in the cloud services sector.<\/p>\n
Google, Amazon and Microsoft have reported accelerated growth in their cloud divisions, which sell computing power to both AI developers \u2013 notably OpenAI and Anthropic \u2013 and corporate clients.<\/p>\n
Meanwhile, Meta Platforms, which does not have its own cloud business, stated that artificial intelligence is helping to improve the effectiveness of its advertising products, which has already contributed to a 28 per cent increase in quarterly revenue to $61 billion.<\/p>\n
Despite the massive investments, investors are watching ever more closely to see when exactly spending on artificial intelligence will begin to translate into stable profits.<\/p>\n
The combined free cash flow of Google, Amazon, Microsoft and Meta fell to $7 billion \u2013 the lowest level in the past decade. Only Microsoft and Meta generated more cash than they spent during the quarter.<\/p>\n
Amazon\u2019s CEO, Andy Jassy, stated that the company will have to operate under pressure on its cash flows for some time, as it is building many data centres simultaneously.<\/p>\n
According to him, it can take around two years between the launch of a new facility and the installation of equipment that generates revenue.<\/p>\n
Analysts point out that, due to the significant gap between the substantial initial investment and future returns, investors will have to wait several years before seeing the full financial benefits of the current race for artificial intelligence.<\/p>\n","protected":false},"featured_media":152020,"menu_order":0,"template":"","newscat":[9],"newstag":[],"issues":[],"class_list":["post-152019","news","type-news","status-publish","has-post-thumbnail","hentry","newscat-novosti"],"_links":{"self":[{"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/news\/152019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/types\/news"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/media\/152020"}],"wp:attachment":[{"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/media?parent=152019"}],"wp:term":[{"taxonomy":"newscat","embeddable":true,"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/newscat?post=152019"},{"taxonomy":"newstag","embeddable":true,"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/newstag?post=152019"},{"taxonomy":"issues","embeddable":true,"href":"https:\/\/ldaily.ua\/en\/wp-json\/wp\/v2\/issues?post=152019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}