Generative artificial intelligence growth is about to receive a significant boost as tech giants look to tap into the vast opportunities around revolutionary technology. Analysts at Morgan Stanley believe that tech companies led by Amazon (AMZN), Alphabet’s Google (GOOGL), Microsoft (MSFT), and Meta Platforms (META) are well poised to spend over $300 billion in capital expenditures in a bid to take advantage of the technology.
AI $300B Investment
The rampage highlights the enormous expenses and resources used in the global AI boom that ChatGPT sparked. Tech behemoths are vying for the limited supply of top-tier chips and constructing the expansive data centers that the technology requires.
In order to power these facilities and revive nuclear plants, the companies have struck agreements with energy providers. Each of them is attempting to persuade Wall Street that these significant expenditures will increase the profitability of their future companies relative to the ones that are now selling software, goods, and digital advertisements.
A significant chunk of the $300 billion investment is to go towards developing large-scale language models and generative AI growth, affirming the vast opportunities around AI-driven innovation. Amazon is expected to lead the AI-driven spending spree with up to $96.4 billion, followed closely by Microsoft on $89.9 billion. Google’s and Meta AI’s capital expenditures are expected to top $62.6 billion and $52.3 billion, respectively.
AI Innovations
Alphabet’s Google is leveraging artificial intelligence to strengthen its product portfolio, such as YouTube and Search, as it looks to strengthen its revenue base. In addition to increasing engagement and monetizing Reels, Meta focuses on productivity, efficiency, and lean operations. Microsoft is expected to be the largest spender in this sector because of advancements in AI and public cloud adoption.
Brian Nowak, an analyst at Morgan Stanley, predicts that Microsoft’s robust business growth will lead to several expansions and favorable valuation revisions in the upcoming years. By 2025, Amazon is probably going to devote the greatest amount of capital to its super-scale plans.
According to Nowak, Amazon can make significant investments while still profitable because of its high-margin businesses. Furthermore, a longer adoption cycle for cloud computing is beginning, and Amazon is growing its market share in e-commerce and retail space.
AI Antitrust Probe
Amid the investment spree around artificial intelligence, antitrust authorities in the US have launched probes concerning antitrust violations. The authorities are looking into investments made into AI startups OpenAI and Anthropic by Microsoft, Google and Amazon.
Major authorities are taking this action as part of their efforts to ensure that regulatory oversight can keep up with advancements in artificial intelligence and prevent powerful companies from excluding rivals in a field that has the potential to disrupt numerous industries.
With a reported $13 billion investment in OpenAI, the company behind ChatGPT, Microsoft has made the fastest progress in the generative AI revolution. Last year, Google and Amazon made significant investments in Anthropic, founded by former OpenAI employees and regarded as a potential major player in the rapidly developing field of generative AI. Amazon previously declared its intention to enhance its Alexa voice assistant with generative AI, claiming that this would enable users to have more fluid conversations with the linked device.
