Overall, the investment in AI represents one of the largest infusions of cash into a specific technology in Silicon Valley's history, and will help further strengthen the largest tech firms at the heart of the U.S. economy. May provide because other companies, governments and individual users these companies for AI tools and software.
Heavy investment is also driving predictions of how much energy the U.S. will need in the coming years. In West Virginia, old coal plants that were scheduled to close will continue to run to send energy to a large and growing data center hub in neighboring Virginia.
We are committed to making the investments needed to position us at the leading edge,” Google's Porat said in a conference call Thursday. “This is a once-in-a-generation opportunity,” added Google CEO Sundar Pichai.
Even before OpenAI released ChatGPT in late 2022, the biggest tech companies were spending steadily on AI research and development. But the quick success of chatbots has prompted big companies to suddenly increase their spending even more. Venture capitalists also poured money into the space, and startups with just a handful of employees were raising hundreds of millions to build their AI tools.
That boom drove up the price of the high-end computer chips needed to train and run complex AI algorithms, driving up prices for big tech companies and startups. AI engineers and researchers are also in short supply, and some have salaries in the millions of dollars.
Nvidia, the computer chip maker whose graphic processing units, or GPUs, have become essential for training AI, expects to earn about $24 billion this quarter, compared with the same quarter two years ago. had earned $8.3 billion. A massive increase in earnings has made investors buy the company's stock so much that It is now the third most valuable company in the world after Microsoft and Apple.
Some of the AI hype of last year has come back down to earth. Not every AI startup that has received major venture capital funding is still around. Concerns about AI growing too fast for humans to keep up seem to have largely been silenced. But the revolution is here to stay, and the rush to invest in AI is already helping Microsoft and Google grow revenue.
Microsoft's revenue for the quarter was $61.9 billion, up 17 percent from a year earlier. Google's revenue rose 15 percent to $80.5 billion in the quarter.
Interest in AI has brought in new customers that have helped boost Google's cloud revenue, leading the company to beat analysts' expectations. Shares rose about 12 percent in aftermarket trading. At Microsoft, demand for its AI services is so high that the company currently can't keep up with demand, CFO, Hood said.
For Meta, the challenge is building the AI, while convincing investors that it will eventually make money from it. While Microsoft and Google sell access to their AI through their large cloud software businesses, Meta has taken a different route. It has no cloud business, and is instead making its AI freely available to other companies, while looking for ways to put the tech into its own social media products. Earlier this month, Meta integrated AI capabilities into its social networks, including Instagram, Facebook and WhatsApp messaging platforms. Investors remain skeptical, and its stock fell more than 10 percent after the company forecast a 2024 cash loss of $40 billion.
Building leading AI will also be a big step compared to other experiences we've built into our apps, and it could take years,” Meta CEO Mark Zuckerberg said in a conference call Wednesday. ” “Historically, investing in our apps to build these new scaled experiences has been a very good long-term investment for us and for the investors who engage with us.”