Home Technology Artificial Intelligence AI spending spree: Big tech’s quarterly results draws scrutiny The heightened scrutiny surrounding Big Tech’s AI investments highlights the need for transparency and ethical considerations in AI development by Marisha Singh September 16, 2024 Image credit: Getty Images The world’s largest tech companies—Google, Microsoft, Meta, Amazon, and Apple—are significantly ramping up their investments in artificial intelligence (AI) infrastructure, as shown in their latest earnings reports for 2024. With the global race to lead in AI intensifying, these companies are not only focusing on strengthening their internal capabilities but are also positioning themselves to be key players in the burgeoning AI market. According to a report by Goldman Sachs, global investments in generative AI could surpass $1tn by 2030, and Big Tech appears to be leading the charge. Here’s a look at how these giants are allocating their resources, the focus of their investments, and what this means for their market positioning. Microsoft’s $19bn AI push Microsoft has gained considerable market share as well as increased its value as it has invested heavily in developing and deploying AI across its portfolio. In its fourth-quarter earnings for fiscal year 2024, the company revealed it had spent a significant portion of its $19bn capital expenditure (capex) on AI. Half of this went toward expanding its data centre infrastructure, while the rest was directed towards acquiring central processing units (CPUs) and graphics processing units (GPUs) to enhance its AI and cloud computing capabilities. Microsoft’s commitment to AI extends beyond its own infrastructure. The company is also a major investor in OpenAI, the creator of ChatGPT. However, concerns about OpenAI’s profitability have surfaced, with reports indicating that the startup’s operational costs could reach $8.5bn this year. Google’s AI investments and challenges Alphabet’s Google has also made substantial AI-related investments, including $3bn in data centres. Additionally, the tech giant has reportedly spent $60m training its AI models using Reddit posts, according to reports. Although Google has not disclosed exact figures for its AI investments, executives remain optimistic about their long-term returns. According to reports, Google is pushing forward with its AI strategy, aiming to integrate generative AI more deeply into its core search business, a key focus as it faces increasing competition from Microsoft’s AI-enhanced Bing and emerging platforms like PerplexityAI and OpenAI’s SearchGPT. Meta’s ambitious AI goals Meta, formerly Facebook, has revised its capital expenditure estimates for 2024, increasing them to between $37bn and $40bn. The company is preparing for significant growth in AI spending in 2025 as it continues to invest heavily in AI research and product development. CEO Mark Zuckerberg highlighted Meta’s plans to acquire over 350,000 Nvidia GPUs this year, potentially bringing the company’s total GPU count to around 600,000. This significant investment in computing power is part of Meta’s broader strategy to set up data centres and clusters needed for future AI applications. Zuckerberg also noted that AI would transform Meta’s advertising services. “Advertisers will be able to simply tell us a business objective and a budget, and we’ll handle the rest,” he explained, demonstrating the company’s focus on AI-driven automation for business solutions. Apple’s focus on AI for consumer products Apple’s AI investments have been more discreet. In its third-quarter earnings report, Apple announced research and development (R&D) spending of over $8m, with CEO Tim Cook indicating that AI spending would continue to rise year-on-year. He highlighted the launch of “Apple Intelligence,” a generative AI system designed to enhance user experiences across devices such as iPhones, iPads, and Macs. Although Apple has partnered with OpenAI to integrate ChatGPT into its products, the financial details of this collaboration remain undisclosed. Cook emphasised that AI would play a significant role in transforming Apple’s products, further boosting sales while adhering to the company’s commitment to privacy and user experience. Amazon’s expanding AI ventures Amazon’s recent earnings report revealed that the company is planning to invest over $230m in generative AI startups, including $80m allocated to its AWS Generative AI Accelerator programme. In addition, the e-commerce giant intends to spend $150bn on data centres over the next 15 years, according to Bloomberg. Amazon is positioning AWS as a leading platform for developers to build AI-powered applications, offering substantial compute credits to ensure loyalty among its AI developers. Founder Jeff Bezos has also personally invested in Perplexity AI, a startup valued at over $520m, further underlining the company’s commitment to AI development. Amazon is also looking to manufacture AI chips to reduce its reliance on Nvidia for its cloud computing needs. Ethical and economic concerns amidst AI expansion As Big Tech accelerates its AI spending, there is increasing scrutiny from regulators, investors, and the general public. Concerns range from antitrust issues to ethical challenges posed by AI technologies. Alexey Sidorov, Data Science Guru and Evangelist at Denodo, noted that the dominance of a few tech companies—Google, Amazon, Microsoft, Apple, and Meta—in the AI market raises antitrust concerns. “As of 2023, these five companies control over 80 per cent of the AI market, which stifles competition and innovation,” he explained. This concentration has prompted regulatory investigations to promote a more competitive market. Another major concern is the ethical use of AI technologies, such as facial recognition and deepfake software. Studies have shown that AI systems, particularly facial recognition algorithms, often exhibit biases, leading to higher error rates for women and minorities. MIT research has found that facial recognition misidentifies people of colour 34 per cent more frequently than white individuals, prompting calls for greater transparency and accountability. Sidorov adds that Big Tech’s push for AI dominance has given rise to “economic concerns”. He highlights that the “World Economic Forum has predicted that AI could displace 85 million jobs by 2025, further exacerbating economic inequality. Policymakers are keen to ensure that Big Tech addresses these potential job losses as they continue to invest heavily in AI.” The future of AI in Big Tech The heightened scrutiny surrounding Big Tech’s AI investments highlights the need for transparency and ethical considerations in AI development. While companies like Microsoft, Google, Meta, Apple, and Amazon continue to pour billions into AI, they face mounting pressure to demonstrate that these technologies will generate tangible value for both businesses and society at large. As John Mao, VP of Global Strategic Alliances at VAST Data, pointed out, “The impact that Big Tech has over billions of people globally invites scrutiny every day. For AI, much of this is around the ethics surrounding the use of the technology. Some of the most cutting edge AI research happening in the world today is at the hands of Big Tech because it requires tremendous amounts of money to fund both people (teams of thousands) and infrastructure (GPUs, storage, data centers, etc). There is growing concern that the cost of innovation within AI will be out of reach for smaller companies looking to compete.” The race for AI dominance is far from over, and how these companies navigate ethical, economic, and regulatory challenges will define their success in the coming years. Read: Farm to table reinvented: How AI is driving agricultural value chain transformation Tags Amazon Apple Big Tech Google meta microsoft You might also like US sets new rule that could spur AI chip shipments to the Middle East Microsoft to set up key engineering centre in Abu Dhabi Dubai’s DET, Amazon launch accelerator for SMEs Abu Dhabi’s MGX, Microsoft, BlackRock partner to launch $30bn AI fund