The investors of Meta appear to be running out of patience as the company aims to increase spending in the field of artificial intelligence (AI). Meta's stock witnessed a dump of 15 per cent in extended trade after it forecasted higher spending in AI next year. The concession from Meta in its quarterly report allegedly has cast a cloud on other companies like Alphabet and Google as well that are expected to reveal their quarterly earnings soon.
During Meta's earnings conference call, analysts bombarded CEO Mark Zuckerberg with questions about how Meta was pacing its AI investments. One of the analysts present there asked him whether Meta was spending more because it saw an even bigger opportunity from AI. Zuckerberg while responding said, "I think we've gotten more ambitious and optimistic on AI. All of that basically encourages me to make sure that we're investing to stay at the leading edge of this."
The process of generating content using generative AI consumes a considerable amount of energy, which Mark Zuckerberg mentioned as a factor contributing to Meta's increased expenses.
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Alphabet's Quarterly Earnings
In a recent research note, analysts from New Street Research highlighted concerns regarding Alphabet's potential for significantly higher capital expenditures, especially with the upcoming results on Thursday. The research firm revised its estimate for Alphabet's full-year capital expenditures to $45.9 billion, up from the earlier projection of $42.7 billion. Google so far has been pursuing advancements in generative AI like anything. It even recently introduced Gemini, a model capable of comprehending and generating various forms of content such as text, audio, and video.
Microsoft on the other hand stands tall as a frontrunner in AI, due to its collaboration with OpenAI. OpenAI's ChatGPT initiated the surge in generative AI interest last year.