LIVE MARKETS-Big Tech bets billions on AI while enterprises struggle to scale
Big Tech is investing heavily in AI, with companies like Meta, Microsoft, Alphabet, and Amazon committing billions annually. Despite the hype, a report reveals that 95% of organizations see no return on AI investments, as many remain in pilot phases. In contrast, Big Tech is integrating AI into products, leading to significant stock gains. Meta shares are up 28% this year, while enterprise AI integrators like Accenture have seen declines. Investors are focusing on companies that can monetize AI effectively, highlighting a stark divide in the market.
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BIG TECH BETS BILLIONS ON AI WHILE ENTERPRISES STRUGGLE TO SCALE
AI hype is dominating investor discussions, but only a few companies are turning it into real gains. While most enterprise businesses are still stuck in pilot projects, Big Tech is betting billions on AI driving the next tech revolution.
Meta (META.O) , Microsoft (MSFT.O) , Alphabet (GOOGL.O) and Amazon.com (AMZN.O) are pouring hundreds of billions of dollars annually into AI infrastructure, even as a new report finds that “95% of organizations are getting zero return” on AI investments.
The report published by MIT’s Project NANDA initiative on Tuesday says there has been widespread adoption but little transformation.
Over 80% of companies have piloted tools like ChatGPT, yet only 5% of custom AI deployments have made it into full-scale use. The culprit? A “learning gap” where most systems fail to adapt to workflows or retain context, leaving pilots stalled and return on investment elusive.
Mega-caps, by contrast, are all in.
Meta expects to spend $66 billion to $72 billion this year on AI data centers and has signaled another year of similarly significant capital spending growth next year.
Alphabet raised its 2025 capex forecast to $85 billion, citing strong and growing demand for cloud products and services, while Amazon plans to top $115 billion, with CEO Andy Jassy calling AI a “once-in-a-lifetime opportunity” for Amazon’s cloud division.
Investors seem to like the bet. Meta shares are up about 28% this year, Alphabet up 6.5%, Microsoft up 21% and Amazon up 4%. Meanwhile, Accenture (ACN.N) and Cognizant (CTSH.O) , bellwethers for enterprise AI integration, have slumped 27% and 8% respectively.
The contrast is clear: Big Tech is turning AI investments into products and services by weaving them into ads, cloud, and e-commerce, while most enterprise businesses are still stuck in pilot mode.
For now, investors are betting on those who can make AI pay, not just play.
(Akash Sriram)
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AI winners and laggards: Big Tech surges, integrators struggle
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
