Big tech companies splash big on AI

Major corporations like Amazon, Meta, and Zoom have been making significant investments in artificial intelligence (AI) amid a notable boom in the AI sector this year. Amazon, for example, has invested $4 billion in the AI startup Anthropic, while Meta has introduced generative AI tools for advertisers, and Zoom has launched products to compete with tech giants like Microsoft and Google, which have supported OpenAI. These investments underscore the disruptive potential of AI across various industries, as noted by KPMG U.S. Chair Paul Knopp.

However, concerns related to rising interest rates have recently led to losses in AI exchange-traded funds (ETFs), with declines ranging from 4.4% to 8%.

Despite this recent downturn, analysts predict substantial growth in AI sector investments. Wedbush analysts anticipate an additional trillion dollars of spending in the sector over the next decade. Goldman Sachs forecasts that global AI investments will reach $200 billion by 2025 and could eventually account for as much as 4% of the U.S. GDP.

CEOs are looking for returns on their AI investments within a relatively short timeframe of three to five years, indicating that these investments are still in their early stages but hold transformative potential. However, senior analysts at Jefferies caution that the AI investment trend is not a zero-sum game, suggesting that certain companies are likely to emerge as winners in this evolving landscape.