Key tech stocks were a mixed bag in early trading Thursday after executives at Meta and Microsoft said they plan to keep pouring billions of dollars into AI – despite lingering anxiety over the launch of China-based DeepSeek’s AI model.
DeepSeek’s rise spooked tech investors who were already skittish about the amount of money that Big Tech firms were spending to develop AI.
It also caused some to question whether Nvidia and other AI leaders would see less demand for their products if cheaper alternatives existed.
Despite the chaos, Facebook and Instagram parent Meta surged nearly 4% after CEO Mark Zuckerberg affirmed that he plans to spend “hundreds of billions of dollars” on key AI-related infrastructure like computer chips and data centers.
During his call with analysts, Zuckerberg acknowledged that DeepSeek had accomplished “a number of novel things” that “we’re still digesting.”
“I continue to think that investing very heavily in [capital expenditures and infrastructure] is going to be a strategic advantage over time,” Zuckerberg said. “It’s possible that we’ll learn otherwise at some piint, but I just think it’s way too early to call that.”
The US tech sector was under pressure earlier this week, with giants like chip supplier Nvidia losing a collective $1 trillion in value in a single day on Monday after DeepSeek claimed to have trained its latest model for less than $6 million without access to Nvidia’s best hardware. Some experts have questioned whether the firm has obscured its true costs.
Microsoft, another key AI player, saw its shares plunge by 6% after providing weaker-than-expected revenue guidance for its upcoming quarter.
The company said it had made DeepSeek’s model available to its cloud computing customers.
CEO Satya Nadella also indicated that Microsoft would continue investing in AI – and expressed confidence that it would boost profits in the long term.
The firm has teed up $80 billion in spending on AI-related efforts in fiscal 2025 alone.
Microsoft CFO Amy Hood confirmed spending would increase next year, but at a slower rate.
“As AI becomes more efficient and accessible, we will see exponentially more demand,” Nadella said.
Elsewhere, investment giant SoftBank is reportedly in talks to invest an additional $15 billion to $25 billion in OpenAI, according to multiple reports.
Notably, SoftBank and OpenAI are already partnering with billionaire Larry Ellison’s Oracle on a long-term $500 billion “Stargate” project to build out AI infrastructure in the US. Endorsed by President Trump, the project has already earmarked an initial $100 billion in spending.
OpenAI and Microsoft are reportedly investigating whether DeepSeek improperly used OpenAI’s models to “train” its own product.
Tesla, another stock that slumped earlier this week following DeepSeek’s rise to prominence, jumped about 2% after CEO Elon Musk teased big AI-related plans to come in the next few years.
“AI and robotics – that will bear immense fruit,” Musk told analysts on an earnings call.
“I see a path, I’m not saying it’s an easy path, but I see a path for Tesla being the most valuable company in the world — by far, not even close,” he added.
Musk also said that Tesla would launch a “full self-driving” paid service for customers in Austin, Texas, beginning this June.
Overall, the tech-heavy Nasdaq composite index was down less than 1%.
