Tech giants are pouring unprecedented resources into artificial intelligence (AI) infrastructure as Meta plans up to $40 billion in 2024 spending and AMD rides the wave to record $6.8 billion in revenue. The sector-wide investment surge comes as companies battle to meet soaring demand, with Meta’s AI features driving engagement up 6% to 8% across platforms.
Meta’s AI Ambitions Come With a Hefty Price Tag
Meta’s strong Q3 performance, with record revenues of $40.6 billion, sets the stage for ambitious AI expansion plans requiring massive infrastructure investments. CEO Mark Zuckerberg emphasized that advancing the company’s AI initiatives will demand significant capital expenditure, with 2024’s budget expected to reach $38 billion to $40 billion.
The tech giant’s AI efforts are already showing promising results. Meta AI has attracted over 500 million monthly active users, while AI-driven content recommendation improvements have significantly boosted user engagement. Due to enhanced AI features, Facebook and Instagram have seen time spent increase by 8% and 6%, respectively, this year.
The company’s generative AI tools have gained substantial traction among advertisers. Over a million businesses have used them to create more than 15 million ads in the past month. These AI-powered ads deliver measurable results, with companies seeing a 7% increase in conversions.
Meta’s commitment to AI development extends to Llama language models, with Llama 3 marking an industry inflection point and Llama 4 already in development. However, this AI-focused future comes at a cost as the company prepares for what Zuckerberg describes as serious infrastructure investments throughout 2024 and beyond.
AI Drives Record Quarter for AMD
AMD’s bet on AI is paying off, with the chip maker reporting record-breaking Q3 2024 revenue of $6.8 billion, largely fueled by surging demand for AI-focused products. The company’s Data Center segment was the star performer, with revenue skyrocketing 122% year over year to $3.5 billion, primarily driven by strong sales of AMD Instinct GPUs and EPYC processors.
“We see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute,” said AMD Chair and CEO Dr. Lisa Su. This appetite for AI processing power has helped the company maintain its momentum in the highly competitive chip market, where it’s battling industry giants like Nvidia and Intel.
AMD’s outlook remains bullish, with Q4 revenue projected to hit approximately $7.5 billion — representing a 22% year-over-year growth. The company’s focus on high-performance computing and AI-optimized chips appears to be resonating with major tech players and data centers rushing to build out their AI infrastructure.