If DeepSeek’s new ultra-efficient AI model was supposed to tank Big Tech’s capital expenditures on artificial intelligence, tech CEOs aren’t letting on. The message from Meta and Microsoft yesterday: Keep calm and spend on.
During Meta’s (mostly positive) earnings call Wednesday afternoon, CEO Mark Zuckerberg emphasized that it was too early to assess the impact of DeepSeek’s model on the AI ecosystem and its computing needs. But for now, he sees no reason not to continue investing heavily in AI capacity. Here’s Zuck:
- “I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time.
- It’s possible that we’ll learn otherwise at some point, but I just think it’s way too early to call that, and at this point, I would bet that the ability to build out that kind of infrastructure is going to be a major advantage.”
He’s betting the cattle farm. Meta has earmarked between $60 billion and $65 billion on capital expenditures this year, a proxy for AI spending. Investors don’t appear to be scared off, sending Meta shares 1.55% higher on the day.
Microsoft’s Satya Nadella sounded a similar note to Zuck, praising China’s DeepSeek for making “some real innovations” but stressing these developments were part of broader efficiency gains his own firm is also making. Microsoft even added DeepSeek’s R1 model to its Azure AI Foundry, a repository of over 1,800 AI models for companies to use. Keep your enemies closer, we guess…
Microsoft also announced no changes to its plan to spend $80 billion on AI data centers this fiscal year, a number that will only grow next year, according to CFO Amy Hood. Shares did fall 6.18% on the day after Microsoft came up short of estimates on cloud growth and issued weak guidance.
Bottom line: In affirming their ginormous spending plans, Zuck and Nadella both argued that DeepSeek’s efficiency gains would spur more demand for AI infrastructure, not less. We’ll see what Tim Cook has to say about DeepSeek this afternoon, when Apple (not a major AI spender) steps up to the earnings stage.
+ Good read: Why hyperscalers’ earnings were great for Broadcom but failed to lift Nvidia from its slump.
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