Practical: AI & Business News Meta and Microsoft Stocks Crash After Massive AI Spending Spree—Investors Panic Over Billions in Costs
Oct 31, 2025
Shares of Meta and Microsoft plummeted after they unveiled staggering AI investments, raising investor concerns about profit erosion. The discussion highlights the contrasting AI strategies, with Meta pursuing open-source models and Microsoft focusing on proprietary solutions. There's a comparison of today's AI spending to early internet infrastructure investments, suggesting that short-term losses could lead to long-term gains. Additionally, industry shifts within both companies are explored, emphasizing AI's potential to enhance human capabilities and create new opportunities.
AI Snips
Chapters
Transcript
Episode notes
Earnings Were Strong But Spending Stole The Show
- Meta and Microsoft reported strong revenue but investors fixated on exploding AI capital expenditures.
- Wall Street fears massive AI spending will squeeze profits before returns materialize.
AI Spending Has Reached Record Levels
- Zuckerberg said Meta expects $35–$40 billion in AI-related spending this year, up from $28 billion.
- Microsoft spent $14 billion in capex this quarter as it scales AI across Azure and products.
AI Is An Infrastructure Bet
- AI is described as an infrastructure play, not a single product launch.
- Early infrastructure investors (like in fiber and cloud) ultimately dominated their markets for decades.