Yazılar

Alphabet Faces Investor Scrutiny Over AI Spending Amid Slowing Cloud Growth

/in /tarafından

Alphabet is set to report earnings on Tuesday, with investors closely watching its substantial AI investments as revenue growth slows due to weaker advertising and cloud performance. The Google parent’s capital expenditure for 2024 is estimated at $50 billion, with further increases expected in 2025 to support cloud expansion and AI-driven search enhancements.

The rise of low-cost AI models, such as those from Chinese startup DeepSeek, has intensified concerns over a potential AI price war. Alphabet, like Microsoft and Meta, is defending its high AI spending, arguing it is necessary to maintain a competitive edge.

Google Cloud, a key growth driver, is anticipated to show a slowdown in the fourth quarter. The segment is expected to report a 32% revenue increase, compared to 35% in the previous quarter. This performance will be scrutinized following Microsoft’s recent results, where Azure’s core cloud services underperformed despite AI-driven gains. Analysts are keen to see whether Google experiences a similar trend.

Alphabet’s Search and Other revenue is projected to have grown 11.2% in Q4, slightly lower than the 12.2% increase in Q3. The company continues to face rising competition from Amazon and TikTok in the digital ad space. However, higher political ad spending linked to the upcoming U.S. Presidential elections may have provided a temporary boost.

Overall, Alphabet’s revenue is estimated to have grown 11.9% year-over-year to $96.6 billion, reflecting a slowdown from the previous quarter. Despite a 7% rise in its stock price this year, concerns about a potential deceleration in its cloud segment have mounted, especially after Microsoft’s disappointing cloud results.

Investors will be closely watching Alphabet’s ability to balance AI investments with profitability, as well as its strategy to maintain leadership in both the search and cloud computing markets.

 

ElevenLabs Secures $180 Million in Series C Funding, Valuation Hits $3.3 Billion

/in /tarafından

Voice AI startup ElevenLabs announced on Thursday that it has raised $180 million in a Series C funding round, bringing the company’s valuation to $3.3 billion, tripling its previous worth. The round was co-led by Andreessen Horowitz and Iconiq Growth, with participation from new investors such as NEA, World Innovation Lab, Valor, Endeavor Catalyst Fund, and Lunate.

The surge in investment comes as venture capitalists look to capitalize on the growing commercial potential of generative AI products following the success of OpenAI’s ChatGPT. Based in London, ElevenLabs plans to use the new funds to further research into more expressive and controllable voice AI, create new products, and expand its tools for developers and businesses.

Since its founding in 2022, ElevenLabs has raised a total of $281 million. The company offers AI-generated voice tools that can create voices in different languages, accents, and emotional tones. CEO Mati Staniszewski emphasized that the goal of the funding is to create digital interactions that feel as natural and effortless as human conversations.

In 2024, ElevenLabs expanded its product offering to include speech generation, voice design, sound effects, and AI-driven dubbing in 32 languages. It has also forged partnerships with major publishers like The New Yorker, The Washington Post, and The Atlantic, as well as gaming studios such as Paradox and Cloud Imperium Games.

Existing investors such as Sequoia Capital, Salesforce Ventures, Smash Capital, and SV Angel are also increasing their backing.

 

Microsoft Shares Drop as Cloud Outlook Disappoints, Meta Gains on AI Optimism

/in /tarafından

Microsoft saw its shares tumble 6% on Thursday after its artificial intelligence (AI) investments failed to significantly boost cloud revenue. Meanwhile, Meta’s stock rose 4% as CEO Mark Zuckerberg reassured investors of strong growth potential, calling 2024 a “really big year.”

Both tech giants defended their heavy AI spending following concerns sparked by Chinese AI startup DeepSeek’s recent advancements in low-cost AI models. However, while Meta continues to show strong ad revenue growth—justifying its AI investments, according to Evercore analyst Mark Mahaney—Microsoft’s Azure cloud platform has struggled.

Microsoft missed market estimates for Azure’s quarterly revenue growth and provided a third-quarter forecast below expectations. The company had previously promised a second-half rebound, but analysts now express skepticism.

“The second-half re-acceleration story for Azure is not playing out,” said Barclays analyst Raimo Lenschow, adding that Microsoft prioritized AI workloads over core Azure functions, delaying the expected growth recovery.

For Meta, a stronger-than-expected 21% revenue increase eased investor concerns about Zuckerberg’s aggressive AI spending plans, which could reach $65 billion this year. Analysts remain bullish, with Barton Crockett of Rosenblatt stating that “Meta might have more benefits to show from AI than anyone.”

At least 15 brokerages raised their price targets on Meta, which saw a 65% stock gain in 2023, the largest among Big Tech firms. The stock’s rally was set to add over $80 billion to its market value.

Conversely, Microsoft was on track to lose about $182 billion in market capitalization. J.P. Morgan analyst Mark Murphy noted that Microsoft “did not recommit to its Azure second-half outlook the same way it did 90 days ago,” weakening confidence in the company’s cloud growth trajectory.