Benzinga - by Anusuya Lahiri, Benzinga Editor.
Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc (NASDAQ:META), and Google parent Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), along with other tech giants, are investing heavily in artificial intelligence infrastructure in 2024, signaling a shift from AI chatbots to the less glamorous, yet critical, “AI plumbing.”
This foundational technology, involving tens of billions of dollars, supports the industry’s burgeoning AI developments.
Companies like Amazon are overhauling their data centers to bolster AI capabilities and building new facilities, and even regions like Saudi Arabia are competing to construct supercomputers tailored for AI, according to the New York Times reports.
Also Read: Microsoft’s Growth Soars with AI Innovations, Projected to Lead in Public Cloud by 2032: Analyst
The rush to enhance AI infrastructure has spurred a spending spree across the tech sector, anticipated to persist for several years.
This week, Microsoft, Meta, and Google’s parent company, Alphabet, reported a combined expenditure exceeding $32 billion on data centers and other capital expenses within the first quarter alone.
Despite this heavy outlay, all three companies have communicated their plans to maintain or increase AI investment levels to investors.
Meta emphasized the urgent need for substantial investment in AI chips and data centers, exceeding prior expectations.
Mark Zuckerberg, Meta’s CEO, affirmed the aggressive spending strategy in a recent investor call, signaling a long-term commitment to AI development.
According to their recent earnings reports, these companies are channeling investments into GPUs, custom AI compute processors (ASICs), and networking infrastructure.
As per JPMorgan analyst Harlan Sur, this is promising news for chip manufacturers such as Broadcom Inc (NASDAQ:AVGO) and Marvell Technology Inc (NASDAQ:MRVL).
Tesla Inc (NASDAQ:TSLA) bull Ross Gerber noted Nvidia Corp (NASDAQ:NVDA) and Meta as the leading beneficiaries of the AI infrastructure spending.
Last week, Tesla CEO Elon Musk announced plans to invest $10 billion in AI training and inference by 2024.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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