AI Spending Worries Cast Gloom over Alphabet, Microsoft

An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo
An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo
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AI Spending Worries Cast Gloom over Alphabet, Microsoft

An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo
An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo

Investors appear to be losing patience with Big Tech's prodigious artificial intelligence investments this week after Meta Platforms signaled deeper spending and a long road to profitability.
The concession from Meta in its quarterly report late on Wednesday cast a cloud over Microsoft and Alphabet , which will both report quarterly earnings on Thursday, Reuters said.
Meta's stock sank 15% in extended trade after it forecast higher AI spending next year, while Microsoft was down 2%, Alphabet fell 3% and Nvidia dropped 1.4% in reaction.
Wall Street's heavyweight tech-related companies have been locked in a fierce battle to advance generative AI, which can create text, videos and photos from prompts and is seen as the next frontier in tech.
During Meta's earnings conference call, analysts peppered CEO Mark Zuckerberg with questions about how the company was pacing its AI investments. One analyst asked whether Meta was spending more because it saw an even bigger opportunity from AI.
"I think we've gotten more ambitious and optimistic on AI," Zuckerberg responded, pointing to Meta's recent launches of new AI models. "So all of that basically encourages me to make sure that we're investing to stay at the leading edge of this."
Alphabet and Microsoft both said earlier this year when they reported fourth-quarter results that they expected rising AI costs. The investor reaction on Wednesday indicated deepening concerns.
In a research note on Monday about Alphabet, analysts from New Street Research said the potential for materially higher capital expenditures was a worry ahead of results on Thursday.
The research firm said it now expects Alphabet's full-year capital expenditures to be $45.9 billion, up from its previous estimate of $42.7 billion.
Google has been working to catch up in the generative AI race and released Gemini, a model that can understand and create different types of information including text, audio and video.
Creating content with generative AI is energy-intensive, and Zuckerberg cited the cost as a reason for Meta's higher expenses.
Meanwhile, Microsoft has positioned itself to be a winner in AI due to its partnership with OpenAI, which kicked off the generative AI craze last year with ChatGPT, said analysts from Jefferies in a note on March 31.
Microsoft has integrated chatbots into its suite of Office products and is planning to invest more in data centers.
Industry-wide, shareholders are now focused on looking for revenue, including pricing models and whether customers can find use cases that justify the cost of generative AI, Jefferies wrote.
"Last year was spent dreaming of gen AI's potential," the analysts wrote. "This year will be about moving forward with concrete steps."



One Tech Tip: Want to Turn off Meta AI? You Can't — But There are Some Workarounds

The logo of Meta Platforms' business group is seen in Brussels, Belgium December 6, 2022. (Reuters)
The logo of Meta Platforms' business group is seen in Brussels, Belgium December 6, 2022. (Reuters)
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One Tech Tip: Want to Turn off Meta AI? You Can't — But There are Some Workarounds

The logo of Meta Platforms' business group is seen in Brussels, Belgium December 6, 2022. (Reuters)
The logo of Meta Platforms' business group is seen in Brussels, Belgium December 6, 2022. (Reuters)

If you use Facebook, WhatsApp or Instagram, you've probably noticed a new character pop up answering search queries or eagerly offering tidbits of information in your feeds, with varying degrees of accuracy.
It's Meta AI, and it's here to help, at least according to Meta Platforms' CEO Mark Zuckerberg, who calls it “the most intelligent AI assistant that you can freely use”, said The Associated Press.
The chatbot can recommend local restaurants, offer more information on something you see in a Facebook post, search for airline flights or generate images in the blink of an eye. If you're chatting with friends to plan a night out, you can invite it into your group conversation by typing @MetaAI, then ask it to recommend, say, cocktail bars.
Meta’s AI tool has been integrated into chat boxes and search bars throughout the tech giant’s platforms. The assistant appears, for example, at the top of your chat list on Messenger. Ask it questions about anything or to “imagine” something and it will generate a picture or animation.
As with any new technology, there are, of course, hiccups, including bizarre exchanges when the chatbots first started engaging with real people. One joined a Facebook moms’ group to talk about its gifted child. Another tried to give away nonexistent items to confused members of a Buy Nothing forum.
Meta AI hasn't been universally welcomed. Here are some tips if you want to avoid using it:
CAN I TURN IT OFF? Some Facebook users don't like the chatbot, complaining in online forums that they're tired of having AI foisted on them all the time or that they just want to stick with what they know. So what if you don't want Meta AI butting in every time you search for something or scroll through your social feeds? Well, you might need a time machine. Meta and other tech companies are in an AI arms race, churning out new language models and persuading — some might say pressuring — the public to use them.
The bad news is there's no one button to turn off Meta AI on Facebook, Instagram, Messenger or WhatsApp. However, if you want to limit it, there are some (imperfect) workarounds.
MUTE...SORT OF On the Facebook mobile app, tap the “search” button. You may get a prompt to “Ask Meta AI anything.” Tap the blue triangle on the right, then the blue circle with an “i” inside it. Here, you'll see a “mute” button, with options to silence the chatbot for 15 minutes or longer, or “Until I change it.” You can do the same on Instagram.
Nonetheless, muting doesn't get rid of Meta AI completely. Meta AI's circle logo might still appear where the search magnifying glass used to be — and tapping on it will take you to the Meta AI field. This is now the new way to search in Meta, and just as with Google's AI summaries, the responses will be generated by AI.
I asked the chatbot about searching Facebook without Meta AI results.
“Meta AI aims to be a helpful assistant and is in the search bar to assist with your questions," it responded. Then it added, "You can't disable it from this experience, but you can tap the search button after writing your query and search how you normally would.”
Then I asked a (human) Meta spokesperson.
“You can search how you normally would and choose to engage with a variety of results — ones from Meta AI or others that appear as you type,” the spokesperson said in a statement. "And when interacting with Meta AI, you have access to real-time information without having to leave the app you’re using thanks to our search partnerships.”
Like an over-eager personal assistant, Meta AI also pops up under posts on your Facebook news feed, offering more information about what’s discussed in the post — such as the subject of a news article. It’s not possible to disable this feature, so you'll just have to ignore it.
USE OLD SCHOOL FACEBOOK Tech websites have noted that one surefire way to avoid Facebook's AI assistant is to use the social network's stripped-down mobile site, mbasic.facebook.com. It's aimed at people in developing countries using older phones on slower internet connections. The basic site has a retro feel that looks crude compared to the current version, and it looks even worse on desktop browsers, but it still works on a rudimentary level and without AI.
OTHER COUNTRIES Meta AI is so far only available in the United States and 13 other countries including Australia, Canada, Ghana, Jamaica, Malawi, New Zealand, Nigeria, Pakistan, Singapore, South Africa, Uganda, Zambia and Zimbabwe. So if you don't live in any of those places, you don't have to worry about the chatbot because you don't get to use it. At least not yet.