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Alphabet praises DeepSeek, but it’s massively ramping up its AI spending
DeepSeek’s AI models shook Nvidia’s stock, but Alphabet and Meta remain committed to AI. Alphabet plans a 42% spending increase to $75B, while Meta continues long-term investments. CEOs Pichai and Zuckerberg see lower AI costs as an opportunity, driving further growth.
Booming AI budgets appeared at risk last week when Chinese AI company DeepSeek sent Nvidia’s stock tumbling, sparking speculation that its cost-efficient models could reduce demand for AI chips and data centers.
Despite this, Alphabet and Meta remain committed to aggressive AI investments. Alphabet CEO Sundar Pichai acknowledged DeepSeek’s advancements, calling its work “tremendous” in the company’s latest earnings call. However, he emphasized that some of Alphabet’s own Gemini models are just as efficient.
Rather than scaling back, Alphabet announced a significant increase in capital expenditures, planning to invest $75 billion this year—a 42% jump—to accelerate its AI development. The company believes that cheaper AI will drive greater demand for its services rather than threaten its business model.
“Part of the reason we are so excited about the AI opportunity is we know we can drive extraordinary use cases because the cost of actually using it is going to keep coming down, which will make more use cases feasible,” Pichai said. “And that’s the opportunity space. It’s as big as it comes, and that’s why you’re seeing us invest to meet that moment.”
Meta CEO Mark Zuckerberg echoed similar sentiments in Meta’s earnings call, reaffirming his company’s commitment to spending “hundreds of billions” on AI over the long term, despite growing competition from DeepSeek.
While the long-term impact of these investments remains uncertain, for now, tech giants continue to pour resources into AI, showing no signs of slowing down.
Source: TechCrunch
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