The technological ‘Magnificent Seven’, the most powerful companies in the United States, led by Nvidia, have closed another good quarter due to the ‘boom’ of Artificial Intelligence (AI) but they also reveal enormous capital expenditures to confront it.
The chip manufacturer Nvidia, the largest listed in the world, reported this Wednesday a quarterly profit of 19,309 million dollars (109% more year-on-year) and a turnover of 35,082 million (94% more), again with its data centers as growth engine.
In total, the big seven Americans – Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla – have amassed net profits of almost 120 billion in the most recent quarter, according to their accounts published from the end of last month until yesterday.
However, analysts also highlight the metric of capital expenditures (“capex”), which are dedicated, among other things, to the infrastructure that allows them to develop their technologies in the long term and expand their capabilities, partly with the purchase of products. Nvidia pointers.
There are several ‘Big Tech’ that have openly said that they will increase this spending in 2025 to absorb the “opportunity” of AI, such as Microsoft, Alphabet and Amazon, whose cloud services are increasingly gaining weight, or Meta, which continues creating the ‘metaverse’ and its related products.
According to an analysis by the Investopedia portal, in this last reported quarter, only Microsoft, Alphabet, Amazon and Meta already spent 60,000 million together on properties and equipment (framed in “capex”), an increase of 60% year-on-year, and they have indicated that the number will continue to increase.
The e-commerce and cloud giant Amazon is the one that has made the biggest bet: this quarter it earned 15,328 million dollars (55% more year-on-year), billed 158,877 million (11% more) and invested more than 22,600 million (81% more).
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Tech ‘Magnificent Seven’ accelerate spending to absorb AI demand
Amazon Chief Executive Officer Andy Jassy said on the analyst call that AI is an “unusually large, perhaps once-in-a-lifetime opportunity,” and assured that its customers, businesses and investors will understand “in the long term that we are betting aggressively on it.”
Microsoft, an ally of OpenAI and with great growth in its Azure cloud platform, had a profit of 24,667 million dollars (11% more) and a turnover of 65,585 million (16% more), while its capital expenses amounted to about 20,000 million (80% more).
Alphabet, focused on Google and YouTube advertising, but which is beginning to see returns in its cloud service, had a profit of 26,301 million (33% more) and turnover of 88,268 million (15% more), dedicated to “capex ” about 13,000 million (62% more).
Meta, which also lives off advertising on its social networks, but is developing its AI assistant, among other things, earned 15,688 million (35% more) and earned 40,589 million (19% more), and dedicated to its advertising expenses capital about 9,200 million.
Tesla, an electric vehicle manufacturer included in the technology group, earned 2,167 million (17% more), earned 25,182 million (8% more) and dedicated 3,500 million (43% more) to capex.
The second largest listed company in the world, Apple, creator of the iPhone, had a profit of 14,736 million (35% less) and a turnover of 94,930 million (6% more).
Apple, perceived as one of the last in the race for AI, does not usually report its capital expenditures, and its own CEO, Tim Cook, explained that it follows a “hybrid approach” in which it outsources them, but in June he indicated which had spent about 2,000 million in that quarter, only 3% more year-on-year.
With information from Reuters.
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