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With earnings season in high-gear, one of investors’ primary concerns has been how companies will integrate and monetize artificial intelligence.
Special attention has been paid to companies like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG) (GOOGL), Amazon (NASDAQ:AMZN) and Meta Platforms (META) and their plans for the technology.
With much attention on the topic, Seeking Alpha has compiled some AI-related comments from their respective earnings calls.
Apple
The perception has been that Apple is behind others when it comes to generative AI, but the company sees it differently.
“We continue to feel very bullish about our opportunity in Generative AI,” Apple Chief Executive Tim Cook said on the company’s earnings call. “We are making significant investments, and we’re looking forward to sharing some very exciting things with our customers soon. We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era, including Apple’s unique combination of seamless hardware, software and services integration, groundbreaking Apple’s silicon, with our industry-leading neural engines and our unwavering focus on privacy, which underpins everything we create.”
Chief Financial Officer Luca Maestri added the company will differ from its peers as it pertains to spending on generative AI.
“In other cases, we share [costs] with our suppliers and partners on the manufacturing side, we purchased some of the tools and manufacturing equipment,” Maestri said. “In some of the cases, our suppliers make the investment. [We] do something similar on the data center side. We have our own data center capacity and then we use capacity from third parties. It’s a model that has worked well for us historically and we plan to continue along the same lines going forward.”
Apple will hold its annual developer conference next month, when it is widely expected to make several AI-related announcements.
Amazon
Generative AI was mentioned 20 times on Amazon’s earnings call, with the company seeing it as a way to boost its cloud unit and become its next pillar of growth.
“…[W]e’re seeing strong AWS demand in both generative AI and our non-generative AI workloads, with customers signing up for longer deals, making bigger commitments,” Chief Financial Officer Brian Olsavsky said. “Still relatively early days in generative AI and more broadly, the cloud space, and we see sizable opportunity for growth.”
Alphabet
Though generative AI was mentioned less frequently on Alphabet’s earnings call than it was on Amazon’s call, the technology is just as important for the Sundar Pichai-led firm.
“For nearly a year, we have been experimenting with [search generative experience] and Search labs across a wide range of queries,” Pichai said, while adding the company has been through many technology shifts before.
“We have already served billions of queries with our generative AI features,” Pichai added. “It’s enabling people to access new information, to ask questions in new ways, and to ask more complex questions. Most notably, based on our testing, we are encouraged that we are seeing an increase in Search usage among people who use the new AI overviews as well as increased user satisfaction with the results.”
Microsoft
Microsoft has been at the forefront of the AI revolution thanks to its partnership with OpenAI, maker of the popular ChatGPT chatbot.
Amid a likely 50% year-over-year increase in capital expenditures and news stories about a $100B data center, Chief Executive Satya Nadella said the company wants to be a “leader in this big generational shift and paradigm shift in technology,” especially on the training side.
“We want to be able to allocate the capital required to essentially be training these large foundation models and stay [in] the leadership position there,” Pichai said. “And we’ve done that successfully all the way today, and you’ve seen it flow through our P&L, and you can continue to see that going forward.”
“I realize in the news, it’s a lot more in the quarter nowadays,” Pichai continued. “But if you look at it, we have been doing what is essentially capital allocation to be a leader in AI for multiple years now, and we plan to sort of essentially keep taking that forward.”
Meta
Meta received the most attention as the Mark Zuckerberg-led company increased its 2024 spending plans, largely due to infrastructure investments to support its AI roadmap.
The topic was mentioned a few times on its earnings call, though Chief Executive Mark Zuckerberg said it would likely work out for investors to stick with the company as it increases spending.
“I think it’s worth calling that out that we’ve historically seen a lot of volatility in our stock during this phase of our product playbook where we’re investing in scaling a new product, but aren’t yet monetizing it,” Zuckerberg said. “We saw this with Reels, Stories, as Newsfeed transitioned to mobile and more and I also expect to see a multi-year investment cycle before we fully scaled Meta AI, business AIs and more into the profitable services I expect as well.”
He continued: “Historically, investing to build these new scaled experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us and the initial signs are quite positive here too. But building the leading AI will also be a larger undertaking than the other experiences we’ve added to our apps and this is likely going to take several years.”
