Microsoft, Meta Face Investor Scrutiny Over AI Spending Binge

Microsoft and Meta are facing increased investor scrutiny over their substantial investments in artificial intelligence (AI) technology. The tech giants have been spending heavily on AI research and development, driven by the intensifying competition in the AI space. Microsoft's capital expenditures (capex) surged by 44% in the latest quarter, with a significant portion allocated to cloud computing and AI initiatives. Similarly, Meta's capex rose by 87%, primarily due to its focus on building the "metaverse" and expanding its AI capabilities. Investors are closely monitoring these spending patterns, as they raise concerns about the impact on profitability and long-term returns. While the companies argue that these investments are crucial for maintaining their competitive edge, some shareholders are questioning the pace and scale of the AI spending binge. The article highlights the intense focus on AI among tech giants, reflecting the industry's belief in the transformative potential of the technology. However, the balancing act between near-term financial performance and long-term strategic investments remains a challenge for these companies as they navigate the evolving AI landscape.