Microsoft and Meta are justifying their massive AI investments after DeepSeek claimed to develop a competitive AI model at a fraction of the cost.

Mark Zuckerberg stated that heavy spending on AI infrastructure would be a long-term advantage for Meta.

Satya Nadella emphasized that Microsoft’s investments are necessary to overcome capacity constraints and meet rising AI demand.

Microsoft plans to spend US$80 billion on AI this fiscal year, while Meta has pledged up to US$65 billion.

Investors are growing concerned as Microsoft’s stock fell 5% after forecasting slower Azure growth, and Meta’s AI revenue remains uncertain.

Despite concerns, Microsoft CFO Amy Hood signaled that AI investment growth will slow after fiscal 2025.