Publish: 11:26, 30 Jan, 2025

Microsoft and Meta CEOs defend heavy AI spending after DeepSeek breakthrough

Online Desk
Microsoft and Meta CEOs defend heavy AI spending after DeepSeek breakthrough
Photo - Collected

Days after Chinese upstart DeepSeek revealed a breakthrough in cheap AI computing that shook the U.S. technology industry, the chief executives of Microsoft and Meta defended massive spending that they said was key to staying competitive in the new field.

DeepSeek's quick progress has stirred doubts about the lead America has in AI with models that it claims can match or even outperform Western rivals at a fraction of the cost, but the U.S. executives said on Wednesday that building huge computer networks was necessary to serve growing corporate needs.

"Investing 'very heavily' in capital expenditure and infrastructure is going to be a strategic advantage over time," Meta  CEO Mark Zuckerberg said on a post-earnings call.

Satya Nadella, CEO of Microsoft , said the spending was needed to overcome the 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.

Microsoft has earmarked $80 billion for AI in its current fiscal year, while Meta has pledged as much as $65 billion towards the technology.

That is a far cry from the roughly $6 million DeepSeek said it has spent to develop its AI model. U.S. tech executives and Wall Street analysts say that reflects the amount spent on computing power, rather than all development costs.

Still, some investors seem to be losing patience with the hefty spending and lack of big payoffs.

Shares of Microsoft — widely seen as a front runner in the AI race because of its tie to industry leader OpenAI - were down 5% in extended trading after the company said that growth in its Azure cloud business in the current quarter would fall short of estimates.

"We really want to start to see a clear road map to what that monetization model looks like for all of the capital that's been invested," said Brian Mulberry, portfolio manager at Zacks Investment Management, which holds shares in Microsoft.

Meta, meanwhile, sent mixed signals about how its bets on AI-powered tools were paying off with a strong fourth quarter but a lackluster sales forecast for the current period.

"With these huge expenses, they need to turn the spigot on in terms of revenue generated, but I think this week was a wake-up call for the U.S." said Futurum Group analyst Daniel Newman.

"For AI right now, there's too much capital expenditure, not enough consumption."

There are some signs though that executives are moving to change that.

Microsoft CFO Amy Hood said the company's capital spending in the current quarter and the next would remain around the $22.6 billion level seen in the second quarter.

"In fiscal 2026, we expect to continue to invest against strong demand signals. However, the growth rate will be lower than fiscal 2025 (which ends in June)," she said.

Source: Reuters

Bd-pratidin English/ Afia

More News
Bangladeshi firms join hands with US telecom giant Starlink
Bangladeshi firms join hands with US telecom giant Starlink
Study links brain activity at death to soul departing the body
Study links brain activity at death to soul departing the body
Microsoft developing AI reasoning models to rival OpenAI
Microsoft developing AI reasoning models to rival OpenAI
Musk claims Starlink’s South Africa ban linked to race, authority denies allegations
Musk claims Starlink’s South Africa ban linked to race, authority denies allegations
NASA receives data before Intuitive Machines ends lunar mission
NASA receives data before Intuitive Machines ends lunar mission
Albania bans TikTok for a year amid concerns over violence among children
Albania bans TikTok for a year amid concerns over violence among children
European rocket successfully completes 1st commercial launch
European rocket successfully completes 1st commercial launch
SpaceX's Starship explodes again in space
SpaceX's Starship explodes again in space
Google introduces AI-exclusive version of its search engine
Google introduces AI-exclusive version of its search engine
US firm targets Moon landing with rovers, drone, and drill
US firm targets Moon landing with rovers, drone, and drill
Ancient humans made tools from animal bones 1.5 million years ago
Ancient humans made tools from animal bones 1.5 million years ago
Tech giants oppose YouTube's exemption in Australia's social media law
Tech giants oppose YouTube's exemption in Australia's social media law
Latest News
Bangladeshi firms join hands with US telecom giant Starlink
Bangladeshi firms join hands with US telecom giant Starlink
7 minutes ago | Tech
Accidents kill 578 in February, only slightly lower than previous month
Accidents kill 578 in February, only slightly lower than previous month
9 hours ago | National
Its clear that there might be no national consensus: Salahuddin
Its clear that there might be no national consensus: Salahuddin
9 hours ago | National
Riazul Islam appointed as RAJUK chairman
Riazul Islam appointed as RAJUK chairman
10 hours ago | City
DU Rokeya Hall students bring out torch march demanding death penalty for rape
DU Rokeya Hall students bring out torch march demanding death penalty for rape
10 hours ago | City
Women’s kabaddi team receives bronze medal
Women’s kabaddi team receives bronze medal
10 hours ago | Sports
Increase women's protein intake to accelerate their empowerment
Increase women's protein intake to accelerate their empowerment
11 hours ago | Lifestyle
Dr Arefin Siddique’s condition ‘extremely critical’
Dr Arefin Siddique’s condition ‘extremely critical’
11 hours ago | National
Tarique Rahman talks to Magura rape victim’s mother, assures justice
Tarique Rahman talks to Magura rape victim’s mother, assures justice
11 hours ago | National
S Korea's impeached president released from detention
S Korea's impeached president released from detention
11 hours ago | International
New Bangladesh won’t be built if mob justice, rape continue: Selima Rahman
New Bangladesh won’t be built if mob justice, rape continue: Selima Rahman
11 hours ago | National
Bangladesh football team practice for third consecutive day in Saudi
Bangladesh football team practice for third consecutive day in Saudi
11 hours ago | Sports
EU to strengthen peacekeeping in Bosnia as separatist laws suspended
EU to strengthen peacekeeping in Bosnia as separatist laws suspended
11 hours ago | International
12 injured in shooting at Toronto pub
12 injured in shooting at Toronto pub
11 hours ago | International
36 members of banned Hizb-ut Tahrir arrested across country
36 members of banned Hizb-ut Tahrir arrested across country
12 hours ago | National
Magura’s rape victim shifted to CMH
Magura’s rape victim shifted to CMH
12 hours ago | National
Ship carrying rice from India arrives at Ctg Port
Ship carrying rice from India arrives at Ctg Port
12 hours ago | Business
Joint efforts needed to resolve waterlogging: Advisor Fouzul Kabir
Joint efforts needed to resolve waterlogging: Advisor Fouzul Kabir
12 hours ago | City
Hamas welcomes Ansarallah's ultimatum to Israel
Hamas welcomes Ansarallah's ultimatum to Israel
13 hours ago | International
BNP men burn Prothom Alo in Nikli
BNP men burn Prothom Alo in Nikli
14 hours ago | National
Salahuddin seeks stricter measures against violence on women, children
Salahuddin seeks stricter measures against violence on women, children
14 hours ago | National
Kuki protesters clash with security forces on day 1 of 'Free Movement' in Manipur
Kuki protesters clash with security forces on day 1 of 'Free Movement' in Manipur
14 hours ago | International
Iran's women fights for rights as economic crisis deepens
Iran's women fights for rights as economic crisis deepens
14 hours ago | International
Case filed against four in Magura child rape case
Case filed against four in Magura child rape case
15 hours ago | National
Child rape accused won’t be spared: Social Welfare Advisor
Child rape accused won’t be spared: Social Welfare Advisor
15 hours ago | National
N. Korea unveils nuclear-powered submarine for the first time
N. Korea unveils nuclear-powered submarine for the first time
15 hours ago | International
Dhaka's eyes on signing ASA with Uzbekistan for direct flight
Dhaka's eyes on signing ASA with Uzbekistan for direct flight
16 hours ago | National
Two-state solution fails to secure Palestinian rights: Iran
Two-state solution fails to secure Palestinian rights: Iran
16 hours ago | International
Syrian security forces, allies killed 311 Alawite civilians: monitor
Syrian security forces, allies killed 311 Alawite civilians: monitor
16 hours ago | International
Two-front war threat is a reality: Indian Army
Two-front war threat is a reality: Indian Army
16 hours ago | International
Most Read
Everyone must remain vigilant to ensure women’s rights
Everyone must remain vigilant to ensure women’s rights
23 hours ago | National
International Women's Day 2025: Global celebrations focus on 'Accelerate Action'
International Women's Day 2025: Global celebrations focus on 'Accelerate Action'
23 hours ago | National
Nearly 1.8 million workers at risk as technology advances
Nearly 1.8 million workers at risk as technology advances
21 hours ago | Special
Microsoft developing AI reasoning models to rival OpenAI
Microsoft developing AI reasoning models to rival OpenAI
21 hours ago | Tech
Crime reporter Totini, terrorist Tawsif!
Crime reporter Totini, terrorist Tawsif!
20 hours ago | Entertainment
Mega concert in Qatar with top Bangladeshi stars
Mega concert in Qatar with top Bangladeshi stars
22 hours ago | Entertainment
'Recent attacks on women contradict the dream of a 'New Bangladesh'
'Recent attacks on women contradict the dream of a 'New Bangladesh'
19 hours ago | National
Dhaka ranks second in worst air quality global list
Dhaka ranks second in worst air quality global list
22 hours ago | City
Former Whip 'Bichchu Shamsu' out of reach
Former Whip 'Bichchu Shamsu' out of reach
22 hours ago | National
Apple cider vinegar: A Miraculous remedy or just health fad?
Apple cider vinegar: A Miraculous remedy or just health fad?
20 hours ago | Lifestyle
5 sneaky food combos sabotaging your hormonal health
5 sneaky food combos sabotaging your hormonal health
21 hours ago | Lifestyle
500 individuals to be recruited to assist Police, conduct arrests
500 individuals to be recruited to assist Police, conduct arrests
17 hours ago | City
Miss Universe 2024 Victoria Kjær Theilvig to visit Bangladesh in May
Miss Universe 2024 Victoria Kjær Theilvig to visit Bangladesh in May
23 hours ago | International
Dr Yunus honours outstanding women with ‘Indomitable Women’s Award-2025’
Dr Yunus honours outstanding women with ‘Indomitable Women’s Award-2025’
19 hours ago | National
Early symptoms of silent diseases in women
Early symptoms of silent diseases in women
21 hours ago | Lifestyle
Study links brain activity at death to soul departing the body
Study links brain activity at death to soul departing the body
17 hours ago | Tech
Bangladesh, Singapore seek transparent, cost-effective worker migration
Bangladesh, Singapore seek transparent, cost-effective worker migration
23 hours ago | National
Women leaders call for collective action to end gender inequality
Women leaders call for collective action to end gender inequality
19 hours ago | National
8 career-killing habits you need to stop today
8 career-killing habits you need to stop today
17 hours ago | Lifestyle
Global coffee industry hit by soaring prices and supply challenges
Global coffee industry hit by soaring prices and supply challenges
21 hours ago | Business
Market prices calm after initial surge at the start of Ramadan
Market prices calm after initial surge at the start of Ramadan
23 hours ago | Business
Intense exercise can help with insomnia
Intense exercise can help with insomnia
18 hours ago | Lifestyle
BNP urges govt action over rising violence against women
BNP urges govt action over rising violence against women
18 hours ago | National
Met office forecasts dry weather over country
Met office forecasts dry weather over country
19 hours ago | National
Salahuddin seeks stricter measures against violence on women, children
Salahuddin seeks stricter measures against violence on women, children
14 hours ago | National
BNP men burn Prothom Alo in Nikli
BNP men burn Prothom Alo in Nikli
14 hours ago | National
Musk claims Starlink’s South Africa ban linked to race, authority denies allegations
Musk claims Starlink’s South Africa ban linked to race, authority denies allegations
21 hours ago | Tech
Its clear that there might be no national consensus: Salahuddin
Its clear that there might be no national consensus: Salahuddin
9 hours ago | National
Biman operates all women flight marking Women’s Day
Biman operates all women flight marking Women’s Day
22 hours ago | National
Khaleda Zia an uncompromising Woman
Khaleda Zia an uncompromising Woman
22 hours ago | Special