Big Tech Big 4, ‘AI War of Gentlemen’… Investment expected to be 288 trillion won this year

MS, Meta, Amazon, and Alphabet increase facility investment by 62% in the third quarter

AI investment will continue next year… Amazon CEO: “Opportunity of a lifetime”

There is also the ‘AI bubble theory’, which concerns about performance compared to investment.

Big Tech (PG)

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(Seoul = Yonhap News) Reporter Cha Byeong-seop = Although some are raising concerns about the performance compared to investment in the artificial intelligence (AI) field, the investment in AI facilities by four major U.S. big tech companies this year reached 288 trillion won. It was predicted that it would be so.

According to the Financial Times (FT) on the 1st (local time), Citigroup’s total facility investment for Microsoft (MS), Metaplatform (Facebook’s parent company), Amazon, and Alphabet (Google’s parent company) this year was 2,000, a 42% increase from the previous year. It is expected to reach $9 billion (approximately 288.5 trillion won).

It is expected that about 80% of this will be invested in the data center sector.

According to recently announced performance, these companies’ third quarter facility investment amounted to $60 billion (approximately KRW 82.8 trillion), an increase of approximately 62% compared to the same period last year. Among these, Microsoft spent $14.9 billion (approximately 20.5 trillion won) in the third quarter, a 50% increase compared to the same period last year.

These companies believe that generative AI helps develop core services and control operating costs, and the growth of Microsoft and Google’s cloud division is also considered a factor supporting this.

MS announced that its AI division’s annual sales are close to $10 billion (approximately 13.8 trillion won), which is the fastest growth among Microsoft’s business divisions.

Brent Thiel, an analyst at investment bank Jeffries, said that Microsoft’s disclosure of these figures is unusual and could be evidence that generative AI has begun to generate sales, but pointed out that other companies did not provide specific data on the effect of AI on increasing sales.

Some investors are concerned about facility investment costs rather than unclear profits.

AllianceBernstein’s Jim Tierney asked, “What are the actual benefits (from investing in AI)?” and expressed concern that these companies are investing huge amounts of money in AI, but this is taking a toll on their profits and that this will become more noticeable next year.

After this earnings announcement, the stock prices of Amazon and Alphabet rose thanks to the strong performance of the cloud business. However, each company showed a mixed performance, with Meta’s stock prices falling due to concerns about its spending plan and Microsoft’s stock prices falling due to disappointment in cloud sales growth due to supply constraints.

Meanwhile, Bloomberg reported that companies plan to continue or increase investment in the AI sector next year.

While Amazon’s facility investment this year is expected to reach a record $75 billion (about 103.5 trillion won), Amazon CEO Andy Jassy said the previous day, “AI is a once-in-a-lifetime opportunity.” did it

Meta’s facility investment this year is expected to reach $40 billion (about 55.2 trillion won), and Meta CEO Mark Zuckerberg also announced that he will continue investing in AI.

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2024/11/03 10:27 Sent