Recent Q1 earnings releases from Microsoft, Amazon, Alphabet and Meta reaffirmed that AI spending is continuing to increase through 2024 as companies seek AI-related revenue gains.
Meta reported 27.3% revenue growth and a solid EPS beat in Q1, as it captured tailwinds from 20% growth in ad impressions combined with 6% growth in ad prices. The ad impressions have cooled from 30% growth in mid 2023. Revenue gains were strongest in Rest of World and Europe at nearly 42% and 34% YoY, as Meta capitalized on double-digit growth in ad prices in those regions.
However, one of the most important pieces was that Microsoft’s current “near-term AI demand is a bit higher than our available capacity,” meaning its available GPU supply is not enough to meet demand from customers. Read morethe “initial rollout of Meta AI is going well. Tens of millions of people have already tried it.” He later added that he believes “Meta AI with Llama 3 is now the most intelligent AI assistant that you can freely use.
CFO Brian Olsavsky added that AWS has surpassed a $100 billion run rate and that’s “before you even calculate gen AI, most of which will be created over the next 10 to 20 years from scratch and on the cloud.”
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