Tech giants are pouring money into A.I. as they cut costs elsewhere
Google launched Bard AI, it’s own chatbot to rival Microsoft and OpenAI’s ChatGPT.
Jonathan Raa | Nurphoto | Getty Images
Tech investors are eager to hear how much industry leaders are bolstering profitability now that they’re in cost-cutting mode.
But there’s one area where they also want to see hefty investments: artificial intelligence.
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Alphabet, Microsoft, Amazon and Meta all reported quarterly results this week, updating Wall Street on their efforts to improve efficiency as economic concerns mount. When it comes to AI and the latest boom in so-called large language models (LLMs) that power products like ChatGPT, the mega-cap tech companies can’t afford to get left behind.
Generative AI programs use increasing amounts of data and processing power to produce outputs that seem like they were made by a human — a block of text, a snippet of code, or a computer-generated image. They require specialized supercomputers that aren’t cheap.
On their earnings calls this week, tech CEOs talked at length about the potential for AI, whether they’re building their own models or rapidly integrating it into products. The common theme was their emphasis on the large sums of money they’ll be spending to build and run these applications.
Here’s what executives from Alphabet, Microsoft, Amazon and Meta told analysts:
Alphabet
Sundar Pichai, chief executive officer of Alphabet Inc.
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Sundar Pichai, Alphabet’s CEO, is under intense pressure to deliver AI products due to the perceived threat that the company’s core Google search engine faces from the sophisticated chatbots hitting the market. The company recently declared an internal “code red.”
Pichai said on Tuesday’s earnings call that the company was making “good progress” towards its AI goals.
“We’ll continue to incorporate generative AI advances to make search better in a thoughtful and deliberate way,” Pichai said.
He said Google is using AI to improve the conversion rate of ads and reduce the amount of “toxic text” that goes into AI models. The company is also combining two primary AI teams, Brain and DeepMind.
Pichai said that in addition to using its own homegrown chips to power its models, it’s using processors from Nvidia, which makes the vast majority of graphics chips used to train and deploy cutting-edge AI.
Microsoft
Microsoft CEO Satya Nadella speaks during an interview in Redmond, Washington, on March 15, 2023.
Chona Kasinger | Bloomberg | Getty Images
Microsoft is using OpenAI’s GPT technology in its Bing search engine, Office, and Teams teleconferencing system.
CEO Satya Nadella says that AI will eventually drive revenue growth and is already sparking increased uptake in the company’s apps. Bing, for example, has seen downloads quadruple since Microsoft added a chatbot, he said. Microsoft has generated over 200 million images through its Bing integration.
Nadella warned that a significant amount of capital will be required to build out the massive datacenters needed to run AI applications.
“We will continue to invest in our cloud infrastructure, particularly AI-related spend, as we scale to the growing demand driven by customer transformation,” Nadella said. “And we expect the resulting revenue to grow over time.”
Amazon
Andy Jassy on stage at the 2022 New York Times DealBook on November 30, 2022 in New York City.
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Amazon CEO Andy Jassy gave an unusually lengthy response on Thursday to an analyst’s question about the company’s generative AI plans.
Jassy said Amazon is building its own LLMs, and designing data-center chips for machine learning, emphasizing that the market is massive.
“These large language models, generative AI capability, has been around for a while. But frankly, the models were not that compelling until about six to nine months ago,” Jassy said. “They have gotten so much bigger and so much better so much more quickly that it really presents a remarkable opportunity to transform virtually every customer experience that exists.”
Jassy also said Amazon’s size would allow it to become one of a handful of companies building LLMs, which can take hundreds of computers running for weeks, overseen by expensive machine learning engineers.
“There will be a small number of companies that want to invest that time and money and we will be one of them at Amazon,” Jassy said.
Unlike Microsoft and Google, Amazon’s focus is selling access to the technology through its Amazon Web Services division. However, Jassy said Amazon will work on some applications, such as programs to help engineers write code.
“Every single one of our businesses inside of Amazon are building on top of large language models to reinvent our customer experience,” Jassy said. That includes voice assistant Alexa, he said.
Meta
Mark Zuckerberg, co-founder and CEO of Meta Platforms, in July 2021.
Kevin Dietsch | Getty Images News | Getty Images
Meta CEO Mark Zuckerberg tried to dispel the notion that his company is no longer focused on the metaverse after turning his attention in that direction in late 2021.
But he wanted investors to know that Meta can invest in metaverse technologies while simultaneously putting tons of resources into AI, which he called a “key theme” for his company.
Zuckerberg said that while the company has used machine learning to deliver recommendations and power products like Facebook’s news feed or ad systems, a new main area of focus is generative foundation models.
“It’s been a pretty amazing year of progress on this front, and the work happening now is going to impact every single one of our apps and services,” Zuckerberg said.
He said the company would work on a variety of products using the technology, including chat experiences in WhatsApp and Facebook Messenger, tools for making images for posts on Facebook and Instagram, and eventually programs that could spit out entire videos from short descriptions.
A concept he’s particularly excited about is “AI agents,” which often refer to AI programs that can carry out goals.
“There’s an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful,” Zuckerberg said. One possibility for an AI agent would be to handle customer service for businesses, Meta has said.
Zuckerberg discussed the company’s big investments to build out its datacenters for AI applications. He said the technology was the “main driver” of Meta’s growth in capital expenditures over the past few years.
“At this point we are no longer behind in building out our AI infrastructure,” Zuckerberg said.
That doesn’t mean Meta is done buying graphics processors. Zuckerberg said the company would need to “continue investing,” but would do so after it launches its generative AI products and gets a better grasp on the resources required.
WATCH: Big beat for Amazon
Technology
Nvidia’s Huang says he’s surprised AMD offered 10% of the company in ‘clever’ OpenAI deal
Nvidia CEO Jensen Huang said Wednesday that he’s surprised Advanced Micro Devices offered 10% of itself to OpenAI as part of a multibillion-dollar partnership announced earlier this week.
“It’s imaginative, it’s unique and surprising, considering they were so excited about their next generation product,” Huang said in an interview with “CNBC’s Squawk Box.” “I’m surprised that they would give away 10% of the company before they even built it. And so anyhow, it’s clever, I guess.”
OpenAI and AMD reached a deal on Monday, with OpenAI committing to purchase 6 gigawatts worth of AMD chips over multiple years, including its forthcoming MI450 series. As part of the agreement, OpenAI will receive warrants for up to 160 million AMD shares, with vesting milestones based on deployment volume and AMD’s share price.
If OpenAI exercises the full warrant, the company could acquire roughly 10% ownership in AMD.
AMD shares have soared since the announcement and were up 5% Wednesday, rising a staggering 35% so far this week. Nvidia shares were nearly 3% higher on Wednesday following Huang’s comments.
The deal challenges Nvidia’s dominance in the AI chip industry, a market where AMD has sought to catch up, alongside cloud providers which are developing their own chips.
Nvidia late last month announced it planned to invest up to $100 billion in OpenAI over the next decade. OpenAI agreed to build and deploy Nvidia systems that require 10 gigawatts of power, which Huang said at the time of the announcement is equal to between 4 million and 5 million graphics processing units (GPUs).
Huang said the investment is “very different” from OpenAI’s deal with AMD in that it allows Nvidia to sell directly to the ChatGPT creator.
Nvidia’s investment in OpenAI has underscored concerns about the “circular nature” of some AI infrastructure deals.
Asked how OpenAI will fund the deal with Nvidia, Huang said, “They don’t have the money yet.”
“They’re going to have to raise that money through, first of all, their revenues, which is growing exponentially, equity or debt,” Huang said. “They gave us the opportunity to invest alongside other investors when the time comes.”
Huang added that after Nvidia previously invested in OpenAI, his “only regret is that we didn’t invest more.”
Jensen Huang, CEO of Nvidia, speaking on CNBC’s Squawk Box on Oct. 8th, 2025.
CNBC
Huang also confirmed Nvidia’s involvement in xAI’s latest funding round, in which Elon Musk’s AI startup is reportedly seeking to raise about $20 billion, according to Bloomberg. He said he’s “super excited” about the financing opportunity, adding that he wishes he could give Musk more money.
“Almost everything that Elon is part of, you really want to be part of as well,” Huang said.
Nvidia has also backed AI data center operator CoreWeave, which Huang said he considers one of several “terrific investments” made by the company recently.
“[They’re] really special companies, and they’re building, they’re part of our ecosystem building out the AI infrastructure for the world,” Huang said.
Nvidia and AMD year-to-date stock chart.
Amazon is launching prescription drug kiosks at some One Medical offices in Los Angeles, the company announced Wednesday, in a move that could disrupt brick-and-mortar pharmacy businesses.
The kiosks are operated by Amazon Pharmacy and work similar to a vending machine, disbursing prescriptions for patients “within minutes” of their doctor visit, the company said.
Each machine can stock hundreds of prescriptions, such as antibiotics, inhalers and blood pressure treatments, with inventory that’s tailored to specific locations.
“We know that when patients have to make an extra trip to the pharmacy after seeing their doctor, many prescriptions never get filled,” said Hannah McClellan, Amazon Pharmacy’s vice president of operations. “By bringing the pharmacy directly to the point of care, we’re removing a critical barrier and helping patients start their treatment when it matters most — right away.”
The company is deploying its prescription vending kiosks as pharmacy chains, including Rite Aid, CVS and Walgreens, have struggled with falling drug margins. They also face growing competition for sales of higher-margin items like candy and paper towels from players such as Amazon and Walmart.
Rite Aid last week closed all of its remaining stores after more than 60 years in business, while Walgreens and CVS have also shuttered locations in recent years.
Amazon has for years worked to push deeper into multitrillion-dollar U.S. health-care industry, which is notoriously complex and inefficient.
The company in 2018 acquired online pharmacy PillPack for about $750 million, and launched its own offering two years later called Amazon Pharmacy. It then bought primary-care clinic One Medical in 2022 for $3.9 billion, the third-largest acquisition in its history. Amazon also experimented with its own telehealth service before shuttering it in 2022.
Earlier this year, Amazon restructured its health-care businesses into six units “to move faster and continue to innovate,” after a handful of top health executives departed, CNBC previously reported.
Amazon will start rolling out the kiosks at One Medical clinics in downtown LA, West LA, Beverly Hills, Long Beach and West Hollywood. The company said it expects to add more One Medical offices and other locations “soon after.”
“Over time, we see real potential for this technology to extend to other environments — anywhere quick access to medication can make a difference,” McClellan said in an email.
Amazon pharmacy kiosk.
Courtesy: Amazon
Before patients can use the kiosk, their provider must first send a prescription to Amazon Pharmacy, where it’s verified by one of the company’s pharmacists. Users complete their order in the Amazon app, then scan a QR code at the kiosk.
A remote pharmacist completes a final check of the order before the medication is dispensed, the company said. Patients can also speak with the pharmacist through the kiosk via video or phone call.
McClellan said the kiosks aren’t meant to replace pharmacists “but to bring their expertise closer to the point of care.”
“This model keeps pharmacists at the center of the care experience while expanding how and where they can support patients,” she added.
At launch, the kiosks won’t be available to telehealth patients, only those who receive in-person care at One Medical. Patients aren’t required to be a One Medical member to use the kiosks.
WATCH: Google and Amazon race to upgrade voice assistants with AI
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