DeepSeek Disrupts the AI Titans: Google, Meta, and Microsoft Fight Back with Unprecedented Spending
In the last two weeks, we have seen speculations that DeepSeek will revolutionize investments in AI and (might give tough competition to Tech Giants like Meta, Google and Microsoft. They caused Nvidia stocks to go down rapidly and investors feared that the demand for AI chips and data centers would no longer be the same. DeepSeek’s huge success also put a question mark on whether Meta, Google, and Microsoft will be spending less on AI investments.
But in Google parent company Alphabet’s latest earnings call, CEO Sundar Pichai ended the rumours. He noticed a Chinese AI company, DeepSeek, praised what they do and compared it with some Gemini models, stating that they are good enough, too.
He also talked about his plans. Instead of stepping back, Alphabet is doubling down on AI investments, with a massive increase of capital expenditures to $75 billion in 2025, a 42% jump from the previous. Alphabet spent $32.3 billion on capital expenditures in 2023, so $75 billion in 2025 would be a big jump.
The reason?
Cheaper AI could drive higher demand for Google’s AI-powered services. More people will use it, leading to more business opportunities.
Mark’s Meta:
Not only Sundar, but Meta’s CEO Mark Zuckerberg also announced massive long-term AI spending. Zuckerberg already announced last week that Meta would spend more than $60 billion in 2025 alone on capital expenditures, primarily on data centres. Sparking his confidence from his statement over leading the AI dominance race. He also suggests that tech giants aren’t slowing down despite DeepSeek or any newcomer AI model popularity or success.
What is Meta up to:
Meta’s goal with its next model, Llama 4, is to make it the world’s most competitive, even compared to closed models (like ChatGPT). Zuckerberg expects Llama 4 to have agentic capabilities, a mixture of both OpenAI and Anthropic and multimodal ones.
Microsoft’s Agenda:
Microsoft CEO Satya also has a take on DeepSeek’s ‘lower cost’ agenda. He said the spending would ease capacity constraints that have hampered the technology giant’s ability to capitalize on AI.
“As AI becomes more efficient and accessible, we will see exponentially more demand,” he said on a call with analysts.
With this, Microsoft has earmarked $80 billion for AI in its current fiscal year, while Meta has pledged as much as $65 billion. All 3 tech giants seem to have healthy competition in the AI global dominance race. Less concerned about newcomers with their ‘new strategies’.
But here comes the real question:
- Will this huge spending actually pay off?
- Time will surely unfold this mystery.
Stay tuned to learn more.
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