Wall Street entered the panic mode about two weeks ago after the Chinese start Deepseek released a system of artificial intelligence that seemed to be radically more efficient than its US competitors had built.
Investors who had pumped trillions of dollars into technology shares over the past few years worried if tens of billions of dollars that technology companies were spending on new data centers suddenly looked like excess comic.
But the largest technology companies became clear in the latest profit reports that they believe there can be no such thing as overload when it comes to new data centers.
Amazon meant on Thursday that its capital expenses – a figure that includes the construction of the data center and other items like the warehouse – can reach $ 100 billion this year. Microsoft said its expenses could exceed $ 80 billion. The alphabet said it would spend $ 75 billion, and Meta reaffirmed plans for capital spending to hit up to $ 65 billion.
Combined, they can spend about $ 100 billion more than last year on these projects.
Leaders prompted patience. The problem now, they said, is that clients want him more than companies can supply. And the only way they can meet the requirement is to build as much as they can as soon as they can.
“Whenever I see someone else do something better, I say,” Ugh, we should have done it, “Mark Zuckerberg, the chief executive of Meta, told the employees all over the country last week , according to a registration received from the New York Times. “Competition is good,” he added, “but we have to make sure we win.”
Here are some key points to understand this happy moment for technology:
Technology companies need more data centers than they are.
Many companies say they are limited by the supply of chips, the soil and the power needed to build data centers, and are competing to open more of them. Microsoft, the alphabet and Amazon all said they could have higher computing sales in the Cloud if they had the capacity. Cloud services are the typical way it is offered to customers.
Alphabet without “a demand that exceeds our available capacity,” investors Anat Ashkenazi, chief of alphabet finances, told investors. “So we will work hard to address it and make sure we bring more capacities online.”
Microsoft has said it has been limited for a while, and previously told investors that the pressure would be eased earlier this year. But last week, when she reported her latest income, executives told investors who may need until summer to get enough capacity and run to meet full demand. Its shares fell about 5 percent in the post -report schedule trading.
They say the greatest efficiency will expand the use and demand for it
While many people think of databases like extremely expensive, hungry places, where the advanced systems of it develop, they are also where it is located. These are two different steps: training a model that highlights chatgpt, versus asking chatgpt for a recipe suggestion.
The placement of it is known as “inferencing” in the industry; It is where technology companies say more and more, their businesses will flourish.
As the costs fall, “he will be much more ubiquitous,” Satya Nadella, the chief executive of Microsoft, told the investors last week.
Andy Jassy, Amazon’s chief executive, told investors on Thursday that while a world where every application was injected with it could be difficult to understand, “This is the world we are thinking all the time” That vision, he said, has an inference in its essence.
He argued that reducing the costs of inferencing would follow the model of previous technological trends: while the systems become less expensive to settle, Mr. Jassy, customers will “You are excited about what they could build that they always thought it was cost-effective before, and they usually end up spending much more in total. “
Companies say they have to think for a long time.
Cloud providers are accustomed to giving customers the illusion of endless supply, which means they only have to make enough online data centers to transmit the video you want or answer your chatbot question. But they also can’t build too far, closing billions of dollars that can be set elsewhere. Balancing them two – especially when providing soil, chips and power centers can last years – is one of the great challenges facing companies.
Leaders have argued that they can adapt how they use investments, between building and setting up the models, and between their essential business and customer service. Mr. Nadella said Microsoft’s infrastructure was “enough of the mushrooms”. Mrs. Ashkenazi said Google was also flexible. For example, you can “reburry the capacity” to serve Google search instead of Cloud customers.
Mr. Zuckerberg said Meta was studying Deepseek and the ways it created efficiency, but that big investment in databases would be a strategic advantage against a small and agile competitor.
“We serve a billion people plus-this is just a lot of people, so more and more fleets are going to the conclusion,” he told the employees.
Despite the explanation, the cutting of profits – even the big profits of the largest technology companies – are unlikely to excite investors. Companydo company saw the stock price fall after the report of its profits.
Nico grant AND Mike Isaac Reporting contributed by San Francisco.