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Greetings! Mark Zuckerberg is trying to psych out his rivals in artificial intelligence. That’s one interpretation of his Threads post on Monday, declaring that Meta is “going to invest hundreds of billions of dollars” on AI computing capacity to build “superintelligence”—a new buzzword for the most advanced AI imaginable. That’s a more aggressive statement of intentions regarding AI spending than other big tech companies have made so far, although Zuckerberg didn’t give a time frame, and it’s likely he’s simply projecting out 5 to 10 years based on Meta’s current rate of spending. The company has said it will spend up to $72 billion on capital expenditures this year, much of which is for AI data centers. Microsoft and Google already spend as much or more on capex and can presumably keep doing so. But those companies would likely shy away from making such a statement, for fear of freaking out their shareholders about the amount of money required over the long term. Zuckerberg doesn’t have to worry about that, however. Firstly, he’s the unchallenged controlling shareholder of his company—unlike the CEOs of Microsoft and Google—so he can say whatever he wants. And for whatever reason, shareholders are giving Meta a lot of freedom to invest in AI—the stock rose on Monday and is trading at a significant premium to Google on multiples of sales or earnings (lots of factors, such as antitrust concerns, are weighing down Google stock). Zuckerberg certainly thinks Meta has a competitive advantage on spending. In an interview for The Information’s TITV today, he said the spending is about converting “large amounts of capital into…a better service than other less well-funded or less bold competitors will be able to do,” he said. A key point there is his reference to “less well funded.” His Threads post today noted, “We have the capital from our business to do this,” referring to the spending. Zuckerberg is likely thinking about companies like OpenAI or xAI that don’t have the money-making businesses of big tech firms. (For another angle on what Zuckerberg is thinking about on AI, see here). OpenAI has projected it will spend $320 billion on computing and development expenses between 2025 and 2030, we reported earlier this year. But it has to keep raising money to fund its plans. The same is true for xAI, which is scrounging for cash from all corners of Elon Musk’s empire. Musk signaled on Sunday night that he would ask shareholders in Tesla to vote on whether to invest money in xAI. Just a day earlier The Wall Street Journal reported that Musk’s SpaceX would invest $2 billion in xAI as part of a bigger fundraising. But there’s a limit to what SpaceX and Tesla can inject into xAI, given their own capital needs. The bottom line is that competing with Zuckerberg for talent and data center capacity requires pockets as deep as the Mariana Trench. There’s not too many people who can dive as far down as Zuckerberg can. Speaking of Google’s discounted stock valuation, we got more evidence today that Google is making a lot of progress on AI—which Wall Street seems to be ignoring. The Information reported this morning that Google Cloud was proving surprisingly competitive with Amazon Web Services in attracting AI startups, largely because of Google’s Gemini AI technology, which isn’t available to AWS. That follows other signs Google’s Gemini models are now well regarded among developers. Gemini models top the LMArena AI leaderboard on multiple criteria. Investors, of course, are worried about the future of Google’s cash cow—search. Even so, the stock arguably deserves more love than it’s getting.
- Coding assistant company Cognition has entered a definitive agreement to acquire the remaining staff and assets of Windsurf, according to a person with direct knowledge of the matter. All the employees who did not join Google following a $2.4 billion licensing and recruiting deal with Windsurf last week will join Cognition, the person said.
- The U.S. Department of Defense has awarded contracts worth up to $200 million to AI developers xAI, Google and Anthropic to “address critical national security needs,” the agency said Monday. The Pentagon said OpenAI won a similar $200 million contract last month.
- Shopify took a step to restrict AI agents operating on its e-commerce platform, used by millions of merchants to run their online stores. The company has added a warning to the software code its merchants use to power their online stores, stating that it won’t permit agents and other automated bots to complete purchases on behalf of users without “final human review.” (more here).
- Crypto asset manager Grayscale said it has filed paperwork confidentially for a U.S. IPO, joining the ranks of crypto firms seeking to go public after Circle’s successful debut. Digital Currency Group, a crypto conglomerate founded by Barry Silbert, owns Grayscale.
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