Dan Gallagher

all worry about AI disruption, what AI could do to all these traditional tech companies, and that feeds into it as well.

Thank you for having me.

In this case, I boil it down to simplicity versus complexity.

Meta, 98% of their business is advertising.

They've been able to use AI in ways to improve that, drive more engagement, better targeting, and so forth.

And that's showing up in their growth.

And they projected a really strong, essentially, growth acceleration for the first quarter, which kind of sold the message that AI is actually helping them.

And it gave them essentially a pass on what's been this spending.

All of the big companies have been spending a ton on AI.

Meta is spending the most relative to its revenue, and it's going to spend even more.

Like this year is probably going to spend more than half of its revenue on CapEx, which is an obscene amount.

for these companies.

But the stock is up because investors think AI is actually paying off for them.

Microsoft has this like more complex business model where they do software for large corporate customers, for consumers.

There's these mix of like cloud contracts.

They even sell things like Xbox that's in that mix too.

So it's a pretty complicated setup and they're trying to use AI in a number of ways.

One, they're trying to develop it internally to make their own processes better.

They're powering AI computing for companies like OpenAI, which is a very big customer for them.

And they're also trying to drive people like us