What We Learned About the Future of AI from Microsoft, Meta Earnings

Core Insights - The focus of the earnings reports from Microsoft and Meta was on artificial intelligence (AI) and its impact on revenue generation [2][3] - Both companies expressed confidence in their AI investments despite market concerns regarding competition from Chinese start-up DeepSeek [10][11] AI Business Growth - Meta reported that its AI reached 700 million monthly active users in Q4, with its AI-powered Advantage+ marketing service growing by 70% [3] - Microsoft announced an AI revenue run rate of $13 billion for the quarter, exceeding its previous forecast of $10 billion [4] - IBM's AI business generated nearly $2 billion in the last quarter of 2024, accounting for about 40% of its total AI revenue since inception [4] Commitment to AI Investments - Microsoft plans to invest $80 billion in infrastructure for FY2025, having already spent $30.7 billion in the first two quarters, a 56% increase year-over-year [5] - Meta's CEO indicated that the company could invest up to $65 billion in AI this year, viewing it as a strategic advantage [6] - Both Microsoft and Meta expect to cumulatively invest nearly $150 billion in infrastructure in their respective 2025 fiscal years [10] Market Reactions and Future Outlook - Concerns about whether demand will match the scale of AI infrastructure investments have been prevalent on Wall Street, especially with the emergence of DeepSeek [7][8] - Despite market jitters, tech executives believe that DeepSeek's efficiencies could enhance AI application development and increase demand for cloud services [8][10] - Microsoft and Meta executives praised DeepSeek's innovations, suggesting that they could ultimately benefit their businesses by lowering costs and increasing application development [11][12]