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Greetings! When it comes to artificial intelligence, Mark Zuckerberg is not holding back. Meta Platforms revealed Wednesday it was raising its projected capital spending for this year to as high as $72 billion, from a previous high of $65 billion outlined in January. If Meta spent at the upper level of its new projection, its capital outlays this year would be 84% above what it spent last year. It would also be very close to what Google is spending this year, even though Google is a much bigger company by revenues. Zuckerberg, Meta’s CEO, isn’t going hog wild on AI this year because Meta’s business is growing faster than it expected a few months ago. In fact, the company’s second-quarter guidance implies a slowdown by several percentage points, from what was a robust first quarter, when taking into account the impact of foreign exchange volatility on reported revenues. (Find more details on the first quarter here.) No, Zuckerberg said Meta was speeding up its spending simply to get computing capacity online faster. Measured over the long term, Zuckerberg is probably making the right call. On an investor call on Wednesday evening, he went into detail about the business opportunities he sees in AI, while Chief Financial Officer Susan Li got into the nitty-gritty of how Meta is already using the technology. For instance, it is using large language models to refine decisions about the content it recommends to its social media users. Incorporated into Threads, this new technology has already increased the amount of time people spend on the app by 4%, she said. (Of course, for some people, the idea that Meta is using AI to make us more addicted to social media may be alarming!) On the other side of the ledger, Meta is also using AI to improve what ads it shows people, thereby boosting ad revenue. Still, there are risks. Most obviously, the economy is uncertain, although Meta—like Microsoft, which also reported tonight (see below)—doesn’t seem too concerned. Then there are the regulatory issues hanging over Meta. A recent EU ruling could force Meta to change its European service in a way that would have a “significant impact” on revenue as early as the third quarter, Li said on Wednesday. Meanwhile, Meta is currently in court fighting an antitrust lawsuit filed by the Federal Trade Commission, which wants to break up the company. For Zuckerberg, AI is an all-in bet. President Donald Trump’s frequently changing tariff policies have created much uncertainty for businesses, increasing predictions of recession. But that wasn’t the message we got from either of the big tech firms reporting on Wednesday, Microsoft and Meta Platforms. Meta CFO Susan Li said that other than seeing a spending cutback by Asian online-shopping services exporting to the U.S. (referring to Temu and Shein), conditions so far in April had been “healthy.” Similarly, Microsoft CFO Amy Hood said that so far in April, “demand signals” in Microsoft’s commercial businesses as well as LinkedIn, gaming and search had been “consistent,” and the company’s outlook assumes that situation won’t change through the end of June. Indeed, she also mentioned that demand for AI was “growing a bit faster” than it had been, which can only be good news (more here on Microsoft’s quarter). Strikingly, both companies had better than projected performances to report for the March quarter. (For Microsoft, the good news was particularly notable at its Azure cloud service, the focus of many of its AI services, although Hood clarified the outperformance was in the non-AI services!) Also worth noting: While foreign exchange volatility hurt their results in the March quarter, both companies projected that the dollar’s recent weakness will provide a slight boost to their reported results. • Vineet Mehta, a longtime Tesla veteran and one of its most senior battery executives, is leaving the company, according to people close to the situation (more here). • Glean, a startup that builds search chatbots for businesses, is in advanced talks to raise a new financing round led by asset manager Wellington Management that would value it at about $7 billion, two people familiar with the matter said. • Amazon is planning to open dozens of new warehouses over the next 18 months to handle deliveries to rural areas, the company announced on Wednesday. • Google CEO Sundar Pichai and Apple CEO Tim Cook had at least a “couple” of phone calls last year on which Pichai made the case for Apple integrating Google’s Gemini AI chatbot app into iPhones, Pichai testified in court on Wednesday. • Stablecoin provider Circle rejected a takeover offer from crypto company Ripple that was valued at $4 billion to $5 billion, Bloomberg reported. • Waymo and Toyota are exploring a partnership to develop an autonomous vehicle platform for personally owned vehicles, Waymo said Tuesday. The automaker’s mobility technology subsidiary, Woven by Toyota, may join the potential partnership. AI Agenda by Stephanie Palazzolo separates hype from reality and explains how AI is transforming industries. The 4x/week newsletter details the innovation and disruption happening in AI, from the AI startup funding frenzy to the major technological breakthroughs that will set the agenda for decades to come. Sign up today. | 
