Recently, Chinese company DeepSeek has been making waves in the AI market with its ability to use old Nvidia GPUs with great efficiency. This innovation has provided an intelligent model with a much lower budget compared to the costs of big companies such as OpenAI, Meta, Tesla, and Microsoft. This event has raised questions about the financial future of the AI industry and how these new technologies will affect capital expenditures.
Tesla and AI: Huge Investments and a Long-Term Vision
In Tesla’s quarterly earnings call, Elon Musk talked about the company’s capital expenditures for artificial intelligence. So far, these expenditures have amounted to about $5 billion. Although the company expects expenses to remain flat in 2025, Musk indicated that these investments will continue to increase significantly in the future, especially in training the human-like “Optimus” robot.
Musk explained that training robots like Optimus requires 10 times the computing power required to train Tesla cars. However, he noted that the cost of training will decrease over time. Although Tesla may need to invest huge amounts of money over the coming years, Musk believes that the value of this project could reach $ 10 trillion in the future.
As for self-driving, Musk announced the launch of the fully self-driving service in Austin next June, reflecting the company’s great ambitions in the field.
Meta and artificial intelligence: ongoing research and more investments
On the other hand, Mark Zuckerberg, CEO of Meta, referred to DeepSeek and the innovations it has provided in the field of artificial intelligence. Although he acknowledged the great progress in Chinese technology, he considered this progress to be a natural part of competition in the technology market.
Microsoft and capital expenditures: Investing in artificial intelligence
Zuckerberg pointed out that developing Meta’s AI system requires more computing infrastructure. He explained that while the company was focusing on pre-training, a lot of computing must be directed towards AI inference to obtain a higher level of service and intelligence. This is a challenge in light of the high cost.
As for Swan Lee, Meta’s CFO, he confirmed that the company plans to spend $60 billion to $65 billion in capital expenditures for 2025. This spending is aimed at supporting generative AI projects, in addition to the company’s core activities.
As for Microsoft, Satya Nadella, CEO, expressed his optimism about the ability of AI to improve performance in the future. He pointed out that major companies such as DeepSeek are developing advanced software solutions, which enhances the competitiveness of AI in the future.
As for AI costs, Nadella explained that Microsoft is working on improving the efficiency of AI inference, which allows for reducing costs. He stressed that innovations in this area will allow the company to provide high-quality services to customers. Microsoft CFO Amy Hood said the company expects capital expenditures in the third and fourth quarters of 2025 to remain at the same high levels, with future spending expected to increase to support cloud growth.
Implications of Chinese innovations on the AI industry
Chinese innovations in AI are a major turning point in the global technology industry, with DeepSeek making waves after demonstrating a new technology that allows the use of old Nvidia graphics processing units with high efficiency, while significantly reducing costs compared to what Western companies such as OpenAI, Meta and Microsoft spent.
These innovations that have suddenly appeared on the scene threaten to change the equation of competition between Western companies and Chinese companies in the field of artificial intelligence.
Lower production costs and Chinese innovation
One of the most significant implications of Chinese innovation is the ability to dramatically reduce the cost of building AI systems. DeepSeek was able to use older Nvidia GPUs, reducing the capital expenditures that Western companies were spending to build their AI systems.
Western companies, which have been allocating huge budgets to building infrastructure such as data centers and cloud computing, may find themselves forced to reevaluate their financial strategies to keep up with this type of innovation that delivers similar results at lower costs.
A change in capital expenditure trends
As China advances in this area, Western companies may begin to rethink their capital expenditure strategies. These companies may reduce spending on large infrastructure, such as data centers and cloud computing facilities that rely on modern and expensive equipment. Instead, they will direct their investments toward developing software AI technologies that enhance inference efficiency and reduce costs.
For example, Meta had been planning to invest heavily in infrastructure in the coming years, but Chinese innovations may force it to reduce these expenses and focus on software computing rather than investing in expensive hardware components. Future Challenges for Competitive AI
Spending on AI has become one of the most prominent challenges facing Tesla, Meta, and Microsoft. As this field grows rapidly, more investments are needed to maintain competitiveness. However, there are questions about the effectiveness of these investments in light of the fierce competition with Chinese companies such as DeepSeek..
Preparing for the Future of Artificial Intelligence
The future of artificial intelligence seems to be full of challenges and opportunities. Major companies such as Tesla, Meta, and Microsoft must prepare for unprecedented competition in this field. Despite the huge investments required, the potential results may be unprecedented.
