- Large companies are investing huge amounts of resources and money into artificial intelligence.
- But many have yet to see a significant return on investment.
- CEOs hope to reassure shareholders that this was predictable.
Some of the biggest companies in the world are currently betting heavily on artificial intelligence.
In 2023, Apple spent more than $22 billion on R&D for generative AI products. Meta forecast in its latest quarterly results that it would spend between $35 billion and $40 billion this year alone, largely to improve its AI infrastructure.
Demis Hassabis, Google’s head of artificial intelligence, upped the ante and said he expects the search engine giant to spend more than $100 billion on the technology.
Sam Altman, CEO of OpenAI, has an even bigger number: up to $7 trillion to transform the semiconductor industry that will power AI.
That’s a lot of money invested in something that hasn’t generated much revenue so far – except for a few companies.
But executives at companies devoting tons of resources to AI say the same thing to reassure impatient shareholders: Stick around. It happens.
Meta’s stock fell on Wednesday despite better-than-expected sales, in part because of its heavy investments in AI and lackluster revenue forecasts. CEO Mark Zuckerberg hoped to allay investors’ concerns by saying the slowdown was temporary.
“Historically, investing in creating these new experiences at scale in our apps has been a very good long-term investment for us and for the investors who have backed us. And the early signs are pretty positive here too,” Zuckerberg told the investors in an earnings statement. call. “But building cutting-edge AI will also be a larger undertaking than the other experiences we have added to our applications, and it will likely take several years once our new AI services reach scale.”
Elon Musk had even stronger words for investors Tuesday after Tesla reported a drop in profits.
So far, the electric vehicle company has yet to deliver on its promise of autonomous driving, instead offering drivers its Full-Self Driving software, which is actually a driver-assistance feature that requires supervision full time of the operator.
Despite this, Musk insisted during an earnings conference call that Tesla is an AI company and had a specific message for any shareholder who thinks Tesla won’t one day develop autonomous driving.
“If someone doesn’t believe Tesla is going to solve the autonomy problem, I think they shouldn’t invest in the company,” he said on the call. “And we will. And we are.”
Will AI be up to the task?
Other CEOs wonder how and when generative AI will deliver on its ambitious promises.
In January at the World Economic Forum in Davos, AI was the hot topic of the moment, but some technology leaders remained cautious about the technology.
Cloudflare CEO Matthew Prince told Reuters at the time that people should expect an “AI disappointment” in the coming months.
“Everyone says, yes, I can create these cool demos, but where is the real value?” he told the outlet.
Meta shareholders were certainly scared by Zuckerberg’s “wait and see” line.
Nvidia might be the exception to the case. After all, they are the main makers of the chips that power the AI products that companies are racing to build.
Earlier this year, Nvidia beat fourth-quarter expectations by reporting revenue of $22.1 billion, driven in part by strong demand for AI.
On Thursday, Microsoft and Alphabet reported profits that they attributed in part to their respective AI sectors.
Microsoft beat Wall Street expectations by reporting $21.9 billion in profit for the quarter ending March 31. The company attributed this growth to its cloud computing platform, Azure, which includes generative AI services.
Google’s parent company reported a profit of $23.7 billion for the same period. Alphabet CEO Sundar Pichai attributed part of the company’s latest quarter performance to its cloud services, which are now powered by Gemini, Google’s AI model.
“We are well into our Gemini era and there is great momentum within the company,” Pichai said in a statement. “Our leadership in AI research and infrastructure and our global product footprint position us well for the next wave of AI innovation. »
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