TECH

Alphabet Applauds DeepSeek While Significantly Increasing Its AI Investments

Last week, booming AI budgets faced uncertainty when DeepSeek’s crash affected Nvidia’s stock, fueled by speculation that its lower-cost AI models might diminish the demand for AI chips and data centers.

Alphabet CEO Sundar Pichai certainly took notice of the Chinese AI firm, lauding its efforts as “tremendous” during Alphabet’s most recent earnings call, while also mentioning that some of Gemini’s models are equally effective.

However, much like Meta, Alphabet is not conceding defeat in the ongoing AI spending battle among Big Tech. In its latest earnings report, Alphabet revealed plans to increase capital expenditures to $75 billion this year — an impressive 42% rise — to expedite its AI advancements.

Alphabet believes that more affordable AI will significantly enhance the demand for its services, rather than making them virtually free and jeopardizing its business models. The company highlighted that it is poised to benefit from this surge in usage — referred to as inference — due to its vast number of existing users.

“One of the reasons we are so enthusiastic about the AI opportunity is that we know we can create remarkable use cases because the cost of utilizing it is expected to continue decreasing, which will make more applications feasible,” Pichai remarked during the earnings call. “That’s the opportunity we’re targeting. It’s immensely significant, and that’s why we are investing to seize that moment.”

Meta CEO Mark Zuckerberg echoed similar sentiments in Meta’s earnings call last week, committing to invest “hundreds of billions” in AI over the long term, despite the noise surrounding DeepSeek.

While the future remains uncertain, for now, tech giants seem capable of covering their AI expenses, and when (or if) they will ease off is still up for debate.

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