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Big tech has spent $155bn on AI this year. It’s about to spend hundreds of billions more | Artificial intelligence (AI)

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The US’s largest companies have spent 2025 locked in a competition to spend more money than one another, lavishing $155bn on the development of artificial intelligence, more than the US government has spent on education, training, employment and social services in the 2025 fiscal year so far.

Based on the most recent financial disclosures of Silicon Valley’s biggest players, the race is about to accelerate to hundreds of billions in a single year.

Over the past two weeks, Meta, Microsoft, Amazon, and Alphabet, Google’s parent, have shared their quarterly public financial reports. Each disclosed that their year-to-date capital expenditure, a figure that refers to the money companies spend to acquire or upgrade tangible assets, already totals tens of billions.

Capex, as the term is abbreviated, is a proxy for technology companies’ spending on AI because the technology requires gargantuan investments in physical infrastructure, namely data centers, which require large amounts of power, water and expensive semiconductor chips. Google said during its most recent earnings call that its capital expenditure “primarily reflects investments in servers and data centers to support AI”.

Meta’s year-to-date capital expenditure amounted to $30.7bn, doubling the $15.2bn figure from the same time last year, per its earnings report. For the most recent quarter alone, the company spent $17bn on capital expenditures, also double the same period in 2024, $8.5bn. Alphabet reported nearly $40bn in capex to date for the first two quarters of the current fiscal year, and Amazon reported $55.7bn. Microsoft said it would spend more than $30bn in the current quarter to build out the data centers powering its AI services. Microsoft CFO Amy Hood said the current quarter’s capex would be at least 50% more than the outlay during the same period a year earlier and greater than the company’s record capital expenditures of $24.2bn in the quarter to June.

“We will continue to invest against the expansive opportunity ahead,” Hood said.

For the coming fiscal year, big tech’s total capital expenditure is slated to balloon enormously, surpassing the already eye-popping sums of the previous year. Microsoft plans to unload about $100bn on AI in the next fiscal year, CEO Satya Nadella said Wednesday. Meta plans to spend between $66bn and $72bn. Alphabet plans to spend $85bn, significantly higher than its previous estimation of $75bn. Amazon estimated that its 2025 expenditure would come to $100bn as it plows money into Amazon Web Services, which analysts now expect to amount to $118bn. In total, the four tech companies will spend more than $400bn on capex in the coming year, according to the Wall Street Journal.

The multibillion-dollar figures represent mammoth investments, which the Journal points out is larger than the European Union’s quarterly spending on defense. However, the tech giants can’t seem to spend enough for their investors. Microsoft, Google and Meta informed Wall Street analysts last quarter that their total capex would be higher than previously estimated. In the case of all three companies, investors were thrilled, and shares in each company soared after their respective earnings calls. Microsoft’s market capitalization hit $4tn the day after its report.

Even Apple, the cagiest of the tech giants, signaled that it would boost its spending on AI in the coming year by a major amount, either via internal investments or acquisitions. The company’s quarterly capex rose to $3.46bn, up from $2.15bn during the same period last year. The iPhone maker reported blockbuster earnings Thursday, with rebounding iPhone sales and better-than-expected business in China, but it is still seen as lagging farthest behind on development and deployment of AI products among the tech giants.

Tim Cook, Apple’s CEO, said Thursday that the company was reallocating a “fair number” of employees to focus on artificial intelligence and that the “heart of our AI strategy” is to increase investments and “embed” AI across all of its devices and platforms. Cook refrained from disclosing exactly how much Apple is spending, however.

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“We are significantly growing our investment, I’m not putting specific numbers behind that,” he said.

Smaller players are trying to keep up with the incumbents’ massive spending and capitalize on the gold rush. OpenAI announced at the end of the week of earnings that it had raised $8.3bn in investment, part of a planned $40bn round of funding, valuing the startup, whose ChatGPT chatbot kicked in 2022, at $300bn.



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xAI lays off 500 AI tutors working on Grok

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Elon Musk’s artificial intelligence startup xAI has laid off 500 workers from its data annotation team, which helps train its Grok chatbot.

The layoffs were earlier reported by Business Insider.

The AI company notified employees over email that it was planning to downsize its team of generalist AI tutors, according to messages viewed by the publication. The company said the “strategic pivot” meant prioritizing specialist AI tutors, while scaling back its focus on general AI tutor roles.

In response to the story, xAI directed reporters to a post on X, in which the company said it plans to expand its specialist AI tutor team by “10X” and intends to open roles on its careers page.

The human data annotator team at xAI plays a key role in teaching Grok to understand the world by labeling, contextualizing, and categorizing raw data used to train the chatbot. The email sent by xAI said that laid-off workers would be paid through either the end of their contract or Nov. 30, but their access to company systems would be terminated the day of the layoff notice.

Prior to the layoff, the xAI’s data annotation team was one of the largest, with 1,500 full-time and contract staff members, which included AI tutors. The reorganization of the data annotators team comes on the back of a leadership shake-up at the team that saw nine employees reportedly exit the firm last week.

As a sign of its changing approach to training Grok, xAI on Thursday asked some of the AI tutors to prepare for tests, Business Insider reported, that covered traditional domains such as STEM, coding, finance, and medicine, as well as quirkier specialties such as Grok’s “personality and model behavior” and doomscrollers.”

Musk launched xAI in 2023 to compete with OpenAI and Google DeepMind, which are racing to win the AI race. He introduced Grok as a safe and truthful alternative to what he accused competitors of building, “woke” chatbots prone to censorship.



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Google’s newest AI datacenter & its monstrous CO2 emissions

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The impact of the rise of AI on the environment is a very real concern, and it’s not one that’s going away in a hurry. Especially not when Google’s planned new datacenter in the UK looks set to emit the same quantity of Carbon Dioxide in a year as hundreds of flights every week would.

It comes via a report from The Guardian, which has seen the plans for the new facility and the very real carbon impact assessment.



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China doubts artificial intelligence use in submarines

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by Alimat Aliyeva

The integration of artificial intelligence into submarine
warfare may reduce the chances of crew survival by up to 5%,
according to a new report by the South China Morning Post (SCMP),
citing a study led by Meng Hao, a senior engineer at the Chinese
Institute of Helicopter Research and Development,
Azernews reports.

Researchers analyzed an advanced anti-submarine warfare (ASW)
system enhanced by AI, which is designed to detect and track even
the most stealthy submarines. The system relies on real-time
intelligent decision-making, allowing it to respond rapidly and
adaptively to underwater threats. According to the study, only one
out of twenty submarines may be able to avoid detection and attack
under such conditions — a major shift in naval combat dynamics.

“As global powers accelerate the militarization of AI, this
study suggests the era of ‘invisible’ submarines — long considered
the backbone of strategic deterrence — may be drawing to a close,”
SCMP notes.

Historically, stealth has been a submarine’s most valuable
asset, allowing them to operate undetected and deter adversaries
through uncertainty. However, the rise of AI-enabled systems
threatens to upend this balance by minimizing human response
delays, analyzing massive data sets, and predicting submarine
behavior with unprecedented precision.

The implications extend far beyond underwater warfare. In
August, Nick Wakeman, editor-in-chief of Defense One, reported that
the U.S. Army is also exploring AI for use in air operations
control systems. AI could enhance resilience to electronic warfare,
enable better integration of drones, and support the deployment of
autonomous combat platforms in contested airspace.

The growing role of AI in modern militaries — from the seabed to
the stratosphere — raises new questions not only about tactical
advantage, but also about ethical decision-making, autonomous
weapons control, and the future of human involvement in combat
scenarios.

As nations continue investing in next-generation warfare
technology, experts warn that AI may not just change how wars are
fought — it could redefine what survivability means on the modern
battlefield.



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