As They Reduce Costs Elsewhere, Tech Giants Invest Heavily in AI
Alphabet, Microsoft, Amazon, and Meta are investing heavily in artificial intelligence (AI), particularly in the area of large language models (LLMs). These generative AI programs use increasing amounts of data and processing power to produce outputs that seem like they were made by humans. Tech CEOs are emphasizing the importance of investing large sums of money to build and run these applications, as AI is expected to drive revenue growth and is already sparking increased uptake in their apps.
The tech industry is known for being fast-paced and constantly evolving, with companies always striving to stay ahead of the curve. In recent years, one area that has seen a surge of interest and investment is artificial intelligence (AI). Major tech giants such as Alphabet (Google), Microsoft, Amazon, and Meta (formerly Facebook) are all investing heavily in AI, particularly in the area of large language models (LLMs).
LLMs are generative AI programs that use vast amounts of data and processing power to produce outputs that appear to have been created by a human, such as blocks of text, snippets of code, or computer-generated images. However, they require specialized supercomputers that can be expensive to build and operate. Despite the cost, the potential benefits of LLMs have driven these tech companies to invest heavily in AI.
In their recent earnings calls, the CEOs of Alphabet, Microsoft, Amazon, and Meta all discussed their companies’ efforts to improve efficiency and profitability through AI, emphasizing the importance of investing large sums of money to build and run these applications.
Sundar Pichai, CEO of Alphabet, is under pressure to deliver AI products to compete with sophisticated chatbots in the market that could threaten the company’s core Google search engine. Pichai stated that the company was making good progress toward its AI goals and using AI to improve the conversion rate of ads and reduce the toxic text in AI models. Alphabet is also combining two primary AI teams, Brain and DeepMind.
Microsoft is using OpenAI’s GPT technology in its Bing search engine, Office, and Teams teleconferencing system. CEO Satya Nadella stated that AI will eventually drive revenue growth and is already sparking increased uptake in the company’s apps. Nadella warned that a significant amount of capital will be required to build out the massive data centers needed to run AI applications.
Amazon CEO Andy Jassy gave an unusually lengthy response to an analyst’s question about the company’s generative AI plans, stating that Amazon is building its LLMs and designing data-center chips for machine learning. He emphasized that the market for large language models is massive and that Amazon’s size would allow it to become one of the companies building LLMs. Unlike Microsoft and Google, Amazon’s focus is selling access to the technology through its Amazon Web Services division. However, Jassy said Amazon would work on some applications, such as programs to help engineers write code.
Meta CEO Mark Zuckerberg tried to dispel the notion that his company is no longer focused on the metaverse after turning his attention in that direction in late 2021. But he wanted investors to know that Meta can invest in metaverse technologies while simultaneously putting tons of resources into AI, which he called a “key theme” for his company. Zuckerberg said that while the company has used machine learning to deliver recommendations and power products like Facebook’s news feed or ad systems, a new main area of focus is generative foundation models.
Zuckerberg discussed the company’s big investments to build out its data centers for AI applications. He said the technology was the “main driver” of Meta’s growth in capital expenditures over the past few years.