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A few months ago, it wasn’t uncommon to hear corporate executives compare artificial intelligence to super efficient interns: fast and enthusiastic, but you’ll want to check out their work before you go to a client.
Revenues from Silicon Valley this week show that this imaginary intern is ready to take on a more substantial corporate role. As reported recently by the parent alphabets of Meta Platforms, Microsoft and Google, each analyst’s earnings estimates turn a wealth of AI investment into real returns and real-world outcomes.
AI takes the meta, a product and an employee. Founder Mark Zuckerberg reiterated this week that social network AI will one day be able to code as well as mid-range software engineers this year. They also use homemade models to give users a more advantage to ads on Facebook and other apps when clicks more frequently. AI is also working with Instagram users to stick around 6% longer than a year ago.
Meanwhile, Microsoft makes money when companies are spending on AI products, their own products, and hosting them in their data centers. Revenue from Azure, a cloud business, increased 33% year-on-year, with AI services accounting for half of that increase. Amazon’s AI offering is small for a company with a top line of $63.8 billion, but with billions of dollars, nothing is growing in triple digits.
AI is not surprising, it’s even more refined when you consider the money thrown in by creators and a clear sense of what the company pays. The Palmyra X5, a new author model used by AI by Goldman Sachs and Salesforce, can handle problems equivalent to 1,500 pages of text.
These technologies are now doing what was previously only talked about obliquely: replacing people. Language App Duolingo will stop using contractors to work that AI can do. ecommerce Company Shopify will not be hired if AI can do human work.
A survey by consulting firm Bain & Company found that 95% of companies use generated AI, and most companies say their business is good enough to measure. The average company had budgeted $10 million for AI spending by the end of last year, twice as many times as it was penciled in early 2024.
The tech giants are using these benefits to justify their continued investment in AI itself. This doesn’t seem to worry more about investors than it did a few months ago. Meta raises its capital expenditure estimate for that year, and could now reach $720 billion.
It is not clear that this spending will generate sufficient returns over the long term. But as smart interns know, the way to succeed tomorrow is to enter the good bounty of today’s boss. AI keeps that lesson in mind.
john.foley@ft.com
