How are investors reacting to Big Tech's AI spending?

Investors are rewarding companies with solid growth fueled by AI investments but are punishing those that do not show clear returns.

What was Microsoft's financial performance regarding AI?

Microsoft's Azure cloud business growth was only slightly above expectations, and its stock saw a decline after earnings.

Home / Business and Economy / Investors Demand AI Returns: Big Tech Faces Scrutiny

Investors Demand AI Returns: Big Tech Faces Scrutiny

Q: What are Tesla's plans for AI investment?

Tesla plans to more than double its capital expenditure this year, projecting over $20 billion for AI, robotics, and autonomous vehicles.

29 Jan

•

Summary

Investors reward Big Tech for spending if it fuels solid growth.
Microsoft's shares dropped after its Azure growth slightly missed expectations.
Tesla plans to double its AI and robotics spending this year to $20 billion.

Investors Demand AI Returns: Big Tech Faces Scrutiny

Investors are scrutinizing Big Tech's record spending on artificial intelligence, differentiating between companies demonstrating solid growth and those facing potential backlash. Meta Platforms reported a significant 24% revenue increase in the December quarter, attributing gains to AI-enhanced ad targeting and forecasting accelerated growth.

Microsoft, however, saw its Azure cloud business growth only slightly exceed expectations. Concerns were raised about its substantial investment in OpenAI, with the company's stock falling after earnings. Microsoft's finance chief indicated that internal AI development efforts constrained Azure's growth.

Tesla is set to more than double its capital expenditure this year, projecting over $20 billion towards AI, robotics, and autonomous vehicles. This aggressive pivot underscores the growing divide between ambitious AI development goals and investor patience for demonstrable financial returns.