2024 was the year that big tech companies staked a lot of their future on artificial intelligence. The bulk of AI spending came from tech giants such as Amazon, Apple, Meta, Microsoft, and Google’s parent company, Alphabet, with their AI-fuelled capital expenditures surging to a combined $170 billion (up 56 per cent YoY) through the third quarter of 2024, according to a report by Forbes. The accelerated spending on AI reflects how each big tech company sought to define its own competitive edge in 2024. While Amazon unveiled a new generation of AI models and said that it is building the world’s largest AI compute cluster, Apple leaned into offering personalised AI features on its devices. Meta upgraded its Ray-Ban smart glasses with AI capabilities, and its open-source AI models drew widespread attention. Microsoft solidified its position with AI-integrated Office tools, but the year was not without challenges, as the company faced a massive Windows systems outage. Google released AI models and features in Search to fend off newer competitors such as Perplexity and OpenAI, even as it grappled with a major antitrust setback in the courtroom. As we step into 2025, here’s a closer look at the priorities and challenges that are in store for the tech industry's biggest players. Nuclear-powered data centres Tech giants are hungry for nuclear energy to fuel the vast data centres driving the AI takeover. In 2024, Google inked the first-ever corporate agreement to buy nuclear energy from multiple small modular reactors (SMRs) that will be built and operated by Kairos Power, a US-based energy company. Amazon also announced that it is investing over $500 million of its own money to develop SMRs. A shuttered nuclear reactor at Three Mile Island in Pennsylvania, US, is being reactivated to power Microsoft’s AI-driven, data centre energy needs. Meta is seeking proposals from nuclear power developers to help meet its AI and sustainability goals. While there is still a long way to go before the pivot to nuclear energy fully begins, tech giants will continue laying the groundwork for nuclear-powered data centres in 2025. We might also see more of these deals this year. Customised AI chips developed in-house One of the early AI winners of 2024 was Nvidia as demand for its advanced graphics processing units (GPUs) soared, which led to the chip-maker becoming worth a trillion dollars. But the rise of Nvidia has prompted some of its biggest customers such as Meta, Amazon, and even OpenAI to enter the AI chip race. OpenAI is reportedly working with Broadcom and TSMC to develop an AI chip that is designed to support its AI systems. Amazon has already announced that it is building a mega-cluster of chips to power AI models by Anthropic, which is backed by the e-commerce giant. Meta’s homegrown AI chip debuted in the first half of 2024. This year, big tech companies may amplify efforts to develop homegrown AI chips to reduce their dependence on Nvidia. The MAGA culture war is coming US President-elect Donald Trump will take office this year, and the incoming White House administration is expected to go after big tech companies for allegedly silencing conservative voices on their platforms. All three of Trump’s picks to lead the US Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and the Department of Justice’s antitrust division have questioned the growing power of tech giants. “At the FTC, we will end Big Tech’s vendetta against competition and free speech,” Andrew Ferguson, the nominee for chair of the consumer protection and antitrust agency, posted on X. Arguments about speech, censorship and content could take centre stage this year, and big tech companies could be reined in over alleged platform bias against conservatives in the US. Someone’s antitrust luck could run out Going into 2025, big tech companies could face greater antitrust scrutiny. The US government has proposed for Google to be broken up as part of a list of suggested remedies after a landmark court ruling found that the tech giant has an illegal monopoly in the online search engine market. In its counter-proposal, Google floated the idea of putting an end to its long-standing, multibillion-dollar deal with Apple to be the default search engine of Safari web browser, among other proposed fixes. If the court accepts the DOJ’s proposal, Google could face a major restructuring that would drastically impact its revenue model as it would have to divest its flagship search product, Chrome. As for other tech giants, the European Union (EU) will likely continue enforcing provisions of the Digital Markets Act (DMA). The competition regulation requires designated gatekeepers (such as Apple and Meta) to give their rivals access to their core platform services. Currently, Meta and Apple are engaged in a spat over the former’s interoperability requests to access the latter’s iPhone tech. It would be interesting to see how the tussle will play out this year. The AI cloud provider showdown The cloud computing businesses run by big tech companies such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform are the most evident sources of AI-related revenue. Heading into 2025, the battle among these cloud providers to be the go-to platform for hosting AI tools could intensify. Omdia, a global tech research and advisory firm, published a report that examined how major cloud providers are engaged in a close competitive race to deliver AI at scale. “The competition in this sector is intense. Google has an edge related to its strength in fundamental AI research, while AWS excels in operational efficiency, but both players have impressive custom silicon,” Alexander Harrowell, a principal analyst at Omdia, was quoted as saying in the report. “Microsoft Azure seems to be concentrating on satisfying OpenAI’s appetite for capacity,” the report said. Nvidia is also looking to leverage its hardware expertise to strengthen its cloud computing business and gain an edge over traditional cloud providers. In its May 2024 earnings report, the chip giant said it is committed to spend at least $9 billion on cloud computing services over the next few years.
