The US tech giant saw its shares sold off, losing $200 billion in market capitalization after announcing lower-than-expected revenue and a large investment plan. Previously, an unknown Chinese company took the world AI industry by storm despite announcing a small investment.
Shares of Alphabet - Google's parent company - fell more than 8% as soon as the US stock market opened on February 5 (the same evening Vietnam time) after the search giant announced that its fourth quarter 2024 revenue did not meet expectations and had a large investment plan.
Alphabet's market capitalization fell from more than $2.5 trillion to $2.3 trillion.
Alphabet reported revenue of $96.47 billion, up 12% year-over-year but still below the $96.56 billion expected. The company’s YouTube advertising business, search business and services slowed year-over-year.
Alphabet plans to invest $75 billion in artificial intelligence (AI) projects in a race with rivals in the US, Europe and now China, higher than the expected level (about $58.8 billion). Alphabet is also focusing on building new data centers and infrastructure.
Previously, in 2024 or early 2025, plans to spend heavily on artificial intelligence projects would be positive news, helping Alphabet shares or shares of other US technology giants skyrocket.
In fact, in 2024, the wave of artificial intelligence has contributed to the explosive growth of technology stocks in the US market. The US Nasdaq technology index has increased by more than 33% and set new historical highs dozens of times. The leading group includes Apple, Nvidia, Alphabet...
However, now the news about Alphabet's big investment in AI projects suddenly has a negative direction.
The reason investors' expectations have reversed is because at the beginning of the new year of the Snake (from January 27), the world technology market was shaken after the launch of two Chinese artificial intelligence platforms, DeepSeek R1 and Alibaba Qwen.
DeepSeek builds AI models that are rated as being no less than today's leading AI models such as ChatGPT or Claude, while the development cost is extremely low, only a fraction of the super expensive AI models of American technology giants.
However, according to SemiAnalysis, the cost of developing the DeepSeek AI model "is not just $6 million", but can be up to billions of dollars and the analytical ability and high accuracy of DeepSeek R1 are also doubted, but the appearance of the "blockbuster" DeepSeek and then China's Alibaba Qwen has shocked the world technology industry.
Previously, American technology giants continuously announced huge sums of money, tens, even hundreds of billions of dollars, poured into the AI field.
Most recently, on January 22, the Trump administration announced a project to build advanced AI infrastructure in the US, run by OpenAI, with an investment of up to 500 billion USD.
The emergence of DeepSeek has raised doubts among investors about the effectiveness of capital for US technology companies. Many believe that the flow of money into large US corporations for AI may slow down, shifting to smaller AI businesses, possibly in Asia.
Alphabet CFO Anat Ashkenazi said the larger investment plan would help “support the growth of the business across Google Services, Google Cloud, and Google DeepMind.” The money would also go toward “technical infrastructure, primarily servers, followed by data centers and networks.”
Many experts are concerned that when moving to the AI "playground", there will be no room for errors, especially after DeepSeek just caused a stir in this field.
It remains to be seen how the AI race will play out, and whether DeepSeek’s presence will change investment trends in the field. However, the stock market has already shown the trillion-dollar losses of American technology corporations.
However, some experts still believe in the quality of data as well as the accuracy and real efficiency of some American technology giants, including Alphabet. Google has been building data for decades. Google's Gemini AI platform is still highly appreciated, with analysis based on super chip systems and big data.
Source: https://vietnamnet.vn/hau-cu-soc-tu-trung-quoc-ong-lon-cong-nghe-my-bi-that-sung-2368845.html
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