The tide of AI has not stopped for more than a year, and the global computing arms race is becoming more and more intense. At the huge gambling table of AI, the global technology giants have long been seated, scrambling to bet on their chips in order to take the lead.
A few days ago, the four cloud giants in North America have all stated that they will raise their annual capital expenditure, and all of them are aimed at AI.
Meta's annual capital expenditure guidelines are $35 billion-$40 billion, which is expected to increase by 26% over the same period last year.Illuviumcryptobuy.26% Mutual 44.30%. The company is currently tilting its existing resources to AI with the goal of commercializing AI services efficiently.
Microsoft's full-year capital expenditure will grow quarter by quarter, and will increase capital expenditure "significantly" in the next quarter to meet the cost of building data centers to support its AI services. Earlier, it was reported that Microsoft plans to acquire 1.8 million AI chips by the end of this year.
Google's Q1 capital expenditure of $12 billion is expected to remain at or above that level for the full year and will grow by 50 per cent or more this year to at least $48 billion. Google also revealed that the big model Gemini has made rapid progress, leading to an upward trend in capital expenditure, mainly reflected in infrastructure investment.
Brian Olsavsky, Amazon's chief financial officer, said on a recent conference call,IlluviumcryptobuyWe do plan to increase capital expenditure (this year) to invest in generative AI projects and expand AWS capacity.
Analysts at Baird estimate that capital spending by Google's parent companies Alphabet, Amazon, Microsoft and Meta could total about $188 billion this year, up nearly 40 per cent from 2023.
Not only the cloud service providers, but also Musk is eager to win the competition.
Tesla has invested 1 billion US dollars in AI in the first quarter. Musk said a few days ago that he would spend about $10 billion on AI comprehensive training and reasoning, which is mainly used in the automotive field. He even said that any company that did not reach this level of spending and could not use it efficiently would be "kicked out of the competition".
According to Rohit Kulkarni, an analyst at Roth, increasing capital spending in AI also suggests that these tech giants are digging a deep AI moat for 2025 and beyond.
The impact of ▌ AI's performance contribution appears
Behind the overweight bets on AI, the contribution of AI to performance has gradually begun to emerge.
Microsoft and Google, for example, reported better-than-expected quarterly revenue growth as more users turned to services such as Copilot AI assistants and Gemini chat robots.
Amy Hood, Microsoft's chief financial officer, said revenue from Microsoft's Azure cloud computing platform grew 31% from January to March, of which AI services contributed 7% (up from 6% in the previous quarter). She added that recent AI demand was slightly higher than the company's capacity, hampering growth in the current quarter and highlighting the importance of expanding infrastructure spending.
Google's cloud revenue has soared by about 28%, a key driver of which is the strong growth of Google's Workspace, which provides users with a large number of AI features supported by Gemini. Ruth Porat, the company's chief financial officer, also said, "We are seeing a growing contribution from our AI solution."
"Meta revealed that it may take several years to see the results of further increases in spending, which Microsoft and Google have already shown to people." Some analysts pointed out that.
Tejas Dessai, a research analyst at Global X ETFs, said that corporate customers are more willing to make long-term investments in cloud infrastructure, which can help stabilize the "sometimes unstable" industry. "it is clear from the results of Microsoft and Google that the demand for cloud infrastructure is beginning to normalize and that basic cloud infrastructure is showing healthy growth."
▌ global cloud service providers gather at AI card table
Tech giants are spending hundreds of billions of dollars to take the lead in the next generation of AI technology-"this may be the biggest gamble of shareholder capital since the birth of the internet 30 years ago." That's how some people describe it.
Needless to say, the grandeur of the AI narrative, domestic cloud service providers have also joined the bet.
The capital expenditure of the three major operators of Telecom, Mobile and Unicom totaled 353 billion yuan last year, an increase of 0.3% over the same period last year, which is basically in line with the previous guidelines. Looking forward to 2024, the total capital expenditure guidelines of the three companies will fall 5.4% year on year to 334 billion yuan. Although the total investment scale has shrunk, the characteristics of structural changes have been further magnified, and investment will continue to increase in the direction of computing power.
China Mobile expects computing capital expenditure to grow by 21.5% to 47.5 billion yuan in 2024 from a year earlier, accounting for 5.8% of total capital expenditure to 27.5%.
China Telecom plans to invest 18 billion yuan in cloud and computing power in 2024, with the proportion of investment in mobile networks down 4.5 percent from the same period last year.
China Unicom also said that the focus of investment will shift from a stable foundation of network communications services to high-growth computing network intelligence services.
▌ "money Burning" Competition
If you want to make money, burn money first.
In the AI story written by Microsoft, Google and other technology giants, the "revenue-expenditure-re-income" cycle is unfolding, which also gives cloud manufacturers the strength and confidence to increase their computing power. In the early days of the AI era, head manufacturers could survive in fierce competition only if they kept burning money. Guojin Securities believes that it is almost impossible to see the possibility of a slowdown in capital expenditure of head cloud manufacturers in the short term.
"this is an arms race, the opportunities for AI are huge, and spending will remain aggressive or ahead of market expectations." Bernstein analyst Michael Chiang said.
For players of the global AI industry chain, the capital expenditure of these cloud manufacturers has also become a "weather vane" of the industry to a certain extent.
Minsheng Securities reported on April 29th that the capital expenditure of cloud manufacturers or the most important influencing factor of global AI investment. Tianfeng Securities proposes to pay attention to three AI diffusion branch line investment opportunities: domestic computing power, AI new technology silicon light, liquid cooling, and new applications.
(article source: Science and Technology Innovation Board Daily)