Big Tech companies continues to spend billions on AI
The US electricity system may be put under stress as a result of the tech giants Google, Microsoft, and Meta's plans to spend billions on artificial intelligence, which would raise demand for computer chips. These investments might solidify internet companies' position at the core of the US economy and constitute some of the biggest cash injections in Silicon Valley history. With outdated coal plants still in operation to fuel the expanding data center hub in nearby Virginia, the significant investment is also raising estimates for energy demand.
“We’re very committed to making the investments required to keep us at the leading edge,” Google’s Porat said on a Thursday conference call. “It’s a once-in-a-generation opportunity,” Google CEO Sundar Pichai added.
Prior to OpenAI's introduction of ChatGPT in late 2022, the largest tech corporations had already been investing steadily in AI research and development. But the large corporations abruptly increased their spending due to the chatbot's immediate success. In order to develop their own AI tools, start-ups with only a few staff were raising hundreds of millions of dollars from venture capitalists who flooded the market.
High-end computer chips required for training sophisticated algorithms have become more expensive due to the AI boom, which has an impact on both large tech corporations and start-ups. There is a dearth of highly skilled AI researchers and engineers, with some making millions of dollars.
The third-most valuable business in the world, Nvidia, anticipates earnings of almost $24 billion this quarter, up from $8.3 billion in the previous two years. Microsoft and Google have seen increases in revenue as a result of the boom in AI investment; Microsoft's revenue is now $61.9 billion and Google's is $80.5 billion.
“Building the leading AI will also be a larger undertaking than the other experiences we’ve added to our apps, and this is likely going to take several years,” Meta CEO Mark Zuckerberg said on a conference call Wednesday. “Historically, investing to build these new scaled experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us.”