February 5, 2025

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Google Unveils Cost-Efficient AI Model, Big Tech Invests Heavily in AI

The world of artificial intelligence (AI) is rapidly evolving, with tech giants like Google, Alphabet, and Qualcomm making significant strides in AI development and investment. Recently, Google unveiled its Gemini 2.0 Flash, a cost-efficient AI model that can be used to build and run AI-powered applications at a lower cost. This model is part of Google's efforts to expand its lineup of AI models, making AI more accessible to businesses and individuals.

Google's Cheap New AI Model

Google's Gemini 2.0 Flash is priced at $0.10 for every million text, image, and video input tokens processed by the model, and $0.40 for every million text output tokens generated by the model. The model includes native tool use, allowing applications built using it to use Google Search and execute code. This makes it 'built to power agentic experiences,' where applications can take actions without human intervention. Google has also released a preview of an even smaller cost-efficient model called Gemini 2.0 Flash-Lite, which won't be equipped with tool use.

East Bay Tech Company Eyes 1,000-Plus Global Layoffs

Workday, a big East Bay tech company, warned that it plans to slash well over 1,000 jobs as it seeks to capitalize on fast-expanding opportunities in the fledgling AI sector. The company will hire an unspecified number of workers to focus on AI initiatives that are deemed to be promising for the tech company. Artificial intelligence portends a 'massive opportunity' for Workday, but 'some changes' will be required to align the company's workforce with what customers are seeking.

Google Removes Restrictions on Military AI Development

Google has quietly removed a key section from its AI principles, eliminating language that explicitly pledged not to develop AI technologies that could cause harm, including weapons systems. The change comes as global AI competition intensifies and as the Trump administration pushes for stronger collaboration between tech companies and the defense sector. Google's AI principles previously listed on its website included a section titled 'AI Applications We Will Not Pursue,' which stated that the company would not develop 'technologies that cause or are likely to cause overall harm.'

Big Tech's Massive AI CapEx Just 'the Beginning'

Substantial capital expenditure (CapEx) by Big Tech is shaping up to be a key theme of 2025 thus far. Alphabet announced plans to expand its CapEx spending target to $75 billion. Futurum CEO Daniel Newman notes that 'the people that are really in the know realize it's the beginning.' While some people thought the emergence of DeepSeek's cost-effective AI model marked the end of Big Tech's massive CapEx spending, Newman emphasizes that there's little sign of slowing down, as companies are entering a new era of artificial intelligence in which they must invest in building infrastructure to support large-scale workloads.

Arm Gives Muted Forecast, Spurring Concerns About AI Slowdown

Arm Holdings Plc gave a cautious revenue forecast for the current period, adding to recent concern that spending on artificial intelligence computing is slowing. Revenue will be $1.18 billion to $1.28 billion in the fiscal fourth quarter, which runs through March. Though that was up from a prior forecast — and in line with the average Wall Street estimate — some analysts were predicting as much as $1.33 billion.

Nvidia Stock Rises As Alphabet's AI Investment Boosts Semiconductor Sector

Nvidia and Broadcom shares rise after Alphabet's higher-than-expected capital expenditure forecast eased concerns. AMD beats earnings expectations, but its stock declines due to weak gaming and embedded segment revenue. Alphabet's fourth-quarter results showed plans to spend $75 billion on capital expenditures in 2025, significantly above the expected $58 billion. This bolstered confidence in AI-related chipmakers, including Nvidia, as Alphabet remains a key buyer of AI hardware.

Alphabet Inc. Misses Revenue Estimates, Boosts AI Investment to $75B

Alphabet Inc. recently reported its fourth-quarter results, which fell short of analyst expectations. Despite this, the company announced that it will spend $75 billion on its AI buildout this year, a 29% increase from Wall Street's expectations. CEO Sundar Pichai defended the expenditure, stating that Google's Gemini family of AI models is comparable in efficiency to DeepSeek.

Qualcomm Outshines Expectations With AI-Driven Sales Surge

Qualcomm defied expectations with its optimistic forecast for the next quarter, thanks to a boost from AI features in devices powered by its chips. Qualcomm continues to flex its technological muscles in the tech arena, forecasting $10.75 billion and profits of $2.80 per share for its fiscal second quarter. These figures surpassed analyst predictions of $10.34 billion in and $2.69 per share in profits.

Key Takeaways

  • Google's Gemini 2.0 Flash is a cost-efficient AI model that can be used to build and run AI-powered applications at a lower cost.
  • Workday plans to slash well over 1,000 jobs as it seeks to capitalize on fast-expanding opportunities in the AI sector.
  • Google has removed restrictions on military AI development, eliminating language that explicitly pledged not to develop AI technologies that could cause harm.
  • Big Tech's massive AI CapEx is just the beginning, with companies investing in building infrastructure to support large-scale workloads.
  • Arm Holdings Plc gave a cautious revenue forecast, adding to concerns that spending on artificial intelligence computing is slowing.
  • Nvidia and Broadcom shares rose after Alphabet's higher-than-expected capital expenditure forecast eased concerns.
  • Alphabet Inc. will spend $75 billion on its AI buildout this year, a 29% increase from Wall Street's expectations.
  • Qualcomm defied expectations with its optimistic forecast for the next quarter, thanks to a boost from AI features in devices powered by its chips.

Sources

Artificial Intelligence Google Gemini 2.0 Flash AI Development Big Tech Capital Expenditure AI Investment Qualcomm Nvidia Alphabet Workday Arm Holdings AI Computing AI Hardware AI Models AI Applications AI Principles AI Sector AI Infrastructure AI Workloads