The AI divide: chipmakers boom, but costs a worry for Microsoft

Microsoft earnings disappointed investors Tuesday amid worries over how much it's spending on AI, but it's a different story for chipmakers AMD and Samsung, where revenue is booming. Julian Satterthwaite reports.
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It’s all about AI as results come in from global tech giants. And there are growing signs of a divide between those spending on the technology… and those already making money from it.
Microsoft earnings disappointed investors on Tuesday. The tech titan warned it would have to spend a lot more money to build out its AI infrastructure, even as growth slowed in its cloud computing business. Over the fourth quarter, capital spending at the firm rose almost 78 percent, driven almost wholly by AI. The warning on costs sent Microsoft shares down as much as 7 percent in after-hours trade. One analyst said Wall Street doesn’t have patience; it wants to see signs that AI is lifting revenues now.
That is not a problem for the world’s big chipmakers. Tuesday also saw US firm AMD beat expectations and increase its forecast for AI chip sales by $500 million. The company is seen as one of the few potentially viable rivals to Nvidia, which dominates the market. A day later it was a similar story at South Korean giant Samsung. On Wednesday, it reported a 15-fold jump in profits, and forecast robust demand for chips, also driven by AI. The company’s semiconductor division reported its best quarter in two years, driven by explosive demand for high-end silicon used for chatbots and the like. Chip prices were also lifted by the boom, adding another boost to the bottom line. Samsung shares rose close to 1% in early trades Wednesday following the news.