Motley Fool Money The Hyperscalers Are Hyper-Spending
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Jan 30, 2025 
Asit Sharma, an investment analyst at The Motley Fool, joins to dissect the vast spending by Meta and Microsoft, both channeling around 30% of their revenues into capital expenditures. They explore how Meta’s ambitious data center projects could reshape its future and discuss the revolutionary DeepSeek's impact on AI investment perspectives. Sharma also highlights Microsoft’s booming $13 billion AI business and its 'fungible fleet' strategy, signaling profound shifts in tech company dynamics.
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Hyperscalers' CapEx Spending
- Tech giants like Meta and Microsoft are heavily investing in AI infrastructure, spending ~30% of annual revenue.
- They aim to meet future demand, prevent competitors from gaining market share, and normalize future income statements.
DeepSeek's Impact on AI Spending
- DeepSeek's efficient AI model challenges the assumption that current AI spending is the only way to win.
- Software and algorithmic improvements can still significantly impact computational efficiency.
Meta AI Usage
- Mark Zuckerberg claims Meta AI is the most used AI assistant, but it's a misleading comparison.
- Meta AI benefits from existing user bases, unlike standalone assistants like ChatGPT.