Amazon and Apple just told us more about their AI plans - here are three things we learned

In recent days, the world's biggest technology companies, including Microsoft, Meta, Google, Apple, and Amazon, have provided updates on their financials to Wall Street. A common theme emerged: all these companies are planning to continue investing heavily in artificial intelligence (AI).

Investors are now demanding tangible results from the companies' AI spending, which has reached $1tn (£743bn) and is still growing. This has caused volatility in tech stocks in recent days. All major tech companies have launched consumer-facing AI chatbots, such as Meta's Meta AI, Google's Gemini, Amazon's Rufus, and Apple's re-launched Siri.

However, none of these chatbots or related tools generate significant revenue for their respective companies. Instead, Google and Meta are currently spending more money on AI tools than they bring in. Google, owned by Alphabet, and Meta both reported their lowest ever free cash flow, meaning they spent more than they earned.

Meta's Reality Labs, responsible for its AI work, lost nearly $9bn in the first half of the year. Investors' reaction to Meta's quarterly results shows that they are no longer satisfied with executive claims that AI investment will pay off in the future. Meta's shares plunged to their second lowest level in a year after CEO Mark Zuckerberg announced plans for an AI agent and an operation to sell AI tools to other firms, both of which do not yet exist.

Meanwhile, Microsoft's stock soared to a six-month high, despite spending $190bn on AI in the last financial year, showing strong revenue growth and increased adoption of its core AI tool. Tracy Woo, an analyst with Forrester, said Microsoft was delivering returns from its massive AI investments. Google reported that 950 million people use its Gemini chatbot at least once a month, three times the number from a year ago.

Apple, on the other hand, reported selling its core products better than expected, which led to a temporary slowdown in sales due to a shortage of microchips. The company is anticipating high demand for its upcoming Siri update, which will be powered by Google's Gemini chatbot. Apple CEO Tim Cook expressed excitement about Siri AI and hinted at potential paid usage in the future.