Meta, Microsoft lift AI spending, worrying Wall Street ahead of Amazon results | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Thursday
June 12, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
THURSDAY, JUNE 12, 2025
Meta, Microsoft lift AI spending, worrying Wall Street ahead of Amazon results

USA

Reuters
31 October, 2024, 12:20 pm
Last modified: 31 October, 2024, 12:24 pm

Related News

  • Racing ahead: Bangladesh’s place in the AI revolution
  • Microsoft offers to boost European governments' cybersecurity for free
  • How to not write like an AI
  • Microsoft revenue hits $245 billion
  • Anthropic’s latest AI model will blackmail you if you threaten to shut it down

Meta, Microsoft lift AI spending, worrying Wall Street ahead of Amazon results

Microsoft and Meta both said on Wednesday their capital expenses were growing due to their AI investments. Alphabet, too, reported on Tuesday that these expenditures would remain elevated

Reuters
31 October, 2024, 12:20 pm
Last modified: 31 October, 2024, 12:24 pm
AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. Photo: REUTERS/Dado Ruvic/Illustration/File Photo/File Photo
AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. Photo: REUTERS/Dado Ruvic/Illustration/File Photo/File Photo

Big tech companies including Microsoft and Meta are stepping up spending to build out AI data centres in a rush to meet vast demand, but Wall Street is hungry for a quicker payday on the billions invested.

Microsoft and Meta both said on Wednesday their capital expenses were growing due to their AI investments. Alphabet, too, reported on Tuesday that these expenditures would remain elevated.

Amazon, which is set to report results on Thursday, is likely to echo these forecasts.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The extensive capital spending could threaten fat margins at these companies, and pressure on this metric is likely to spook investors.

Big tech shares fell in after-hours trading on Wednesday, highlighting the challenges the companies face as they seek to balance ambitious AI pursuits with the need to reassure investors they are focused on short-term results.

Meta's stock fell 2.9% in after-hours trading, and Microsoft's stock price fell 3.6%, despite each topping profit and revenue expectations for the July-September period. Amazon stock also dipped.

"It's costly to run AI technology. Getting capacity is expensive," said GlobalData analyst Beatriz Valle.

"It has become a competitive race among the big tech companies to build out capacity. It's going to take time to see the returns, to see widespread adoption of the technology."

Microsoft's capital spending for a single quarter now is more than its annual expenditure used to be until fiscal 2020, according to Visible Alpha. For Meta, a quarter's worth of spending is in line with what they spent in a year until 2017.

Microsoft said capital spending rose 5.3% to $20 billion in its first fiscal quarter, and predicted increased spending on AI in the second.

But growth at its key cloud business Azure is likely to slow, it warned, blaming capacity constraints at its data centres.

"I think what investors are missing is that for every year Microsoft overinvests - like they have this year - they're creating a whole percentage point of drag on margins for the next six years," said Gil Luria, head of technology research at D.A. Davidson.

Meta, meanwhile, warned of "significant acceleration" in artificial intelligence-related infrastructure expenses next year.

BOTTLENECKS IMPEDE GROWTH

Capacity constraints are rippling through the tech industry.

Chipmakers including powerhouse Nvidia are struggling to keep up, in turn making it harder for cloud companies to build out capacity.

Advanced Micro Devices, which reported results earlier this week, said demand for AI chips was rising much faster than supply, limiting its ability to tap the order surge. It warned that supply of AI chips would be tight going into next year.

Despite the concerns, Meta and Microsoft said it was still very early in the AI cycle and emphasised the long-term potential of AI.

The investments are reminiscent of when Big Tech was developing cloud businesses and waiting for customers to embrace the technology.

"Building out the infrastructure is maybe not what investors want to hear in the near term, but I think the opportunities here are really big," said Meta CEO Mark Zuckerberg during Wednesday's earnings call. "We're going to continue investing significantly in this."

Top News / World+Biz / Global Economy

Big Tech / Meta / Microsoft / AI

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Keir Starmer declines to meet CA Yunus: FT report
    Keir Starmer declines to meet CA Yunus: FT report
  • Saifuzzaman Chowdhury. Photo: Collected
    UK crime agency now freezes assets of ex-land minister Saifuzzaman: AJ
  • Chief Adviser Muhammad Yunus speaks at the Chatham House in London on 11 June 2025. Photo: CA Press Wing
    No desire to be part of next elected govt: CA Yunus

MOST VIEWED

  • File photo of ex-prime minister Sheikh Hasina and her son Sajeeb Wazed Joy. Photo: Collected
    Joy spends Eid with Hasina in India: Indian media
  • Infofgraphics: TBS
    DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • Saifuzzaman Chowdhury. Photo: Collected
    UK crime agency now freezes assets of ex-land minister Saifuzzaman: AJ
  • File photo of BNP Standing Committee Member Amir Khasru Mahmud Chowdhury. Photo: Collected
    Khasru flies to London ahead of Yunus-Tarique meeting
  • Chief Adviser Muhammad Yunus speaks at the Chatham House in London on 11 June 2025. Photo: CA Press Wing
    No desire to be part of next elected govt: CA Yunus
  • Illustration: Khandaker Abidur Rahman/TBS
    Three hospitals ‘held hostage’ as discharged July uprising injured keep occupying beds

Related News

  • Racing ahead: Bangladesh’s place in the AI revolution
  • Microsoft offers to boost European governments' cybersecurity for free
  • How to not write like an AI
  • Microsoft revenue hits $245 billion
  • Anthropic’s latest AI model will blackmail you if you threaten to shut it down

Features

Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

13h | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

1d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

2d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

4d | Bangladesh

More Videos from TBS

Why is Omicron XBB more contagious?

Why is Omicron XBB more contagious?

10h | TBS Stories
What did Dr. Yunus say at the Chatham House Dialogue in London?

What did Dr. Yunus say at the Chatham House Dialogue in London?

11h | TBS Today
News of The Day, 11 JUNE 2025

News of The Day, 11 JUNE 2025

12h | TBS News of the day
WB predicts worst decade for global growth since 60s

WB predicts worst decade for global growth since 60s

13h | TBS Stories
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net