Here are all the crucial things Tesla, Meta and Microsoft CEOs and CFOs said on their Wednesday evening quarterly conference calls as it relates to Capex and DeepSeek's potential impact on future Capex budgets. The comments are important for AI players, including NVIDIA (NASDAQ:NVDA), Broadcom Inc (NASDAQ:AVGO), Dell (NYSE:DELL), Super Micro Computer Inc (NASDAQ:SMCI), as well as many others.
China's DeepSeek took the world by storm this week by introducing an AI model that runs efficiently on older NVIDIA GPUs, using only a tiny fraction of the budget OpenAI, Meta, Tesla, Microsoft, and others have spent building their AI infrastructure. It has raised serious questions about future spending for AI build-outs.
Tesla Inc (NASDAQ:TSLA) CEO Elon Musk on Capex:
"Accumulated AI-related CapEx, including infrastructure, so far has been approximately $5 billion. And for 2025, we expect our CapEx to be flat on a year-over-year basis."
Elon Musk on compute required for humanoid robot Optimus:
"So the training needs for Optimus, our occupancy humanoid robot are probably at least ultimately 10x what is needed for the car, at least to get to the full range of useful role. You can say like how many different roles are there for a humanoid robot versus a car? A humanoid robot has probably 1,000x more uses and more complex things than in a car.
That doesn't mean the training scales by 1,000 but it's probably at 10x. Now you can do this progressively, so it doesn't mean like Tesla's going to spend like $500 billion in training compute because we will obviously train Optimus to do enough tasks to match the output of robots. And obviously, the cost of training is dropping dramatically with time. But it is -- it's one of those things where I think long-term, Optimus will be -- Optimus has the potential to be north of $10 trillion in revenue, like it's really bananas. So that you can obviously a lot of training compute in that situation.
In fact, even $500 billion training compute in that situation will be quite a good deal. Yes, the future is going to be incredibly different from the past, that's for sure. We live at this unbelievable inflection point in human history. So yes, so the proof is in the pudding. So we're going to be launching unsupervised full self-driving as a paid service in Austin in June."
Meta Platforms Inc (NASDAQ:META) CEO Mark Zuckerberg on DeepSeek and Capex:
"I can start on the DeepSeek question. You know, I think that there's a number of novel things that they did that I think we're still digesting and there are a number of things that they have advances that we will hope to implement in our systems. And that's part of the nature of how this works, whether it's a Chinese competitor or not. You know, I kind of expect that every new company that has an advance, that has a launch, is going to have some new advances that the rest of the field learns from and that's sort of how the technology industry goes.
I don't know, it's probably too early to really have a strong opinion on what this means for the trajectory around infrastructure and CapEx and things like that. You know, there are a bunch of trends that are happening here all at once.
There's already sort of a debate around how much of the compute infrastructure that we're using is going to go towards pre-training versus as you get more of these reasoning time models or reasoning models where you get more of the intelligence by putting more of the compute into inference, whether just it will mix shift how we use our compute infrastructure towards that.
That was already something that I think a lot of the other labs and ourselves we're starting to think more about. And already seemed pretty likely even before this that like of all the compute that we're using that, you know, the largest pieces aren't necessarily going to go towards pre-training, but that doesn't mean that you need less compute. Because one of the new properties that's emerged is the ability to apply more compute at inference time in order to generate a higher level of intelligence, a higher quality of service, which means that as a company that, you know, has a strong business model to support this.
I think that's generally an advantage that we're now going to be able to provide a higher quality of service than others who don't necessarily have the business model to support it on a sustainable basis. The other thing is just that, when we're building things like Meta AI, but also how we're implementing AI, all the feeds and Ad products and things like that, we're just serving billions of people, which is different from, okay, you start to pre-train a model and that model is sort of agnostic to how many people are using it.
Like at some level, it's going to be expensive for us to serve all of these people because we are serving a lot of people. And so I'm not sure what the kind of net effect of all of this is.
The field continues to move quickly. There's a lot to learn from releases from basically everyone who does something interesting, not just this -- not just the ones over the last month. We'll continue to kind of incorporate that into what we do as well as making novel contributions to the field ourselves. And I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time.
It's possible that we'll learn otherwise at some point. But I just think it's way too early to call that. And at this point, I would bet that the ability to build out that kind of infrastructure is going to be a major advantage for both the quality of the service and being able to serve the scale that we want to."
Meta CFO Suan Li on 2025 Capex:
"CapEx outlook. We expect our full year 2025 capital expenses will be in the range of $60 billion to $65 billion. We expect CapEx growth in 2025 will be driven by increased investment to support both our generative AI efforts and our core business. The majority of our CapEx in 2025 will continue to be directed towards our core business."
Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella on a question about DeepSeek and AI costs:
"Yeah. Thanks, Brent. So in my remarks, I talked about how in some sense, what's happening with AI is no different than what was happening with the regular computer cycle. It's always about bending the curve and then putting more points up the curve. So there's Moore's Law that's working in hyperdrive. Then on top of that, there is the AI scaling laws, both the pre-training and the inference time compute that compound, and that's all software.
You should think of what I said in my remarks, which we have observed for a while, which is 10x on improvements per cycle just because of all the software optimizations on inference. And so that's what you see. And then to that, I think DeepSeek has had some real innovations. And that is some of the things that even OpenAI found in o1. And so we are going to -- obviously, now that all gets commoditized, and it's going to get broadly used.
And the big beneficiaries of any software cycle like that is the customers, right? Because at the end of the day, if you think about it, right, what was the big lesson learned from client server to cloud, more people bought servers except it was called cloud. And so when token prices fall, infants computing prices fall, that means people can consume more, and there'll be more apps written.
And it's interesting to see that when I referenced these models that are pretty powerful, it's unimaginable to think that here we are in beginning of '25 where on the PC, you can run a model that requires pretty massive cloud infrastructure. So that type of optimizations means AI will be much more ubiquitous. And so therefore, for a hyperscaler like us, a PC platform provider like us, this is all good news as far as I'm concerned."
Microsoft CFO Amy Hood on Capex:
"We expect quarterly spend in Q3 and Q4 to remain at similar levels as our Q2 spend.
In FY26, we expect to continue investing against strong demand signals including customer contracted backlog we need to deliver against across the entirety of our Microsoft Cloud. However, the growth rate will be lower than FY25 and the mix of spend will begin to shift back to short-lived assets which are more correlated to revenue growth."
This content was originally published on Investing.com
