AI Costs in Focus Ahead of Tech Earnings After Meta’s Q1 Debacle [Video]

Meta’s (META) plan to increase spending on artificial intelligence (AI) unnerved the market, with shares down more than 10% on Thursday. And that has put a spotlight on higher AI costs for other big tech players, especially Microsoft (MSFT) and Alphabet (GOOG) (GOOGL), which report earnings after the bell today.

Wedbush’s Dan Ives said investors should definitely expect other tech companies in similar positions to report increasing costs because of AI.

“It’s a high class problem with the AI Revolution and this arms race,” Ives said.

According to analysts at Raymond James, “AI inflation” is driving up capital expenditures (capex) for big tech, with Amazon (AMZN), Meta, Microsoft, Alphabet and Oracle (ORCL) expected to spend $199 billion on capex this year, about 28% more than in 2023.

Mircosoft’s updates on AI during this evening’s earnings presentationwill be closely watched by investors …