Introduction:

Two and a half years after OpenAI set off the generative artificial intelligence (AI) race with the release of the ChatGPT, big tech companies are accelerating their A.I. spending, pumping hundreds of billions of dollars into their frantic effort to create systems that can mimic or even exceed the abilities of the human brain.  The areas of super huge AI spending are data centers, salaries for experts, and VC investments. Meanwhile, the UAE is building one of the world’s largest AI data centers while Softbank CEO Masayoshi Son believes that Artificial General Intelligence (AGI) will surpass human-level cognitive abilities (Artificial General Intelligence or AGI) within a few years.  And that Artificial Super Intelligence (ASI) will surpass human intelligence by a factor of 10,000 within the next 10 years.

AI Data Center Build-out Boom:

Tech industry’s giants are building AI data centers that can cost more than $100 billion and will consume more electricity than a million American homes.  Meta, Microsoft, Amazon and Google have told investors that they expect to spend a combined $320 billion on infrastructure costs this year. Much of that will go toward building new data centers — more than twice what they spent two years ago.

As OpenAI and its partners build a roughly $60 billion data center complex for A.I. in Texas and another in the Middle East, Meta is erecting a facility in Louisiana that will be twice as large. Amazon is going even bigger with a new campus in Indiana. Amazon’s partner, the A.I. start-up Anthropic, says it could eventually use all 30 of the data centers on this 1,200-acre campus to train a single A.I system.  Even if Anthropic’s progress stops, Amazon says that it will use those 30 data centers to deliver A.I. services to customers.

Amazon is building a data center complex in New Carlisle, Ind., for its work with the A.I. company Anthropic. Photo Credit…AJ Mast for The New York Times

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Stargate UAE:

OpenAI is partnering with United Arab Emirates firm G42 and others to build a huge artificial-intelligence data center in Abu Dhabi, UAE.  The project, called Stargate UAE, is part of a broader push by the U.A.E. to become one of the world’s biggest funders of AI companies and infrastructure—and a hub for AI jobs.  The Stargate project is led by G42, an AI firm controlled by Sheikh Tahnoon bin Zayed al Nahyan, the U.A.E. national-security adviser and brother of the president. As part of the deal, an enhanced version of ChatGPT would be available for free nationwide, OpenAI said.

The first 200-megawatt chunk of the data center is due to be completed by the end of 2026, while the remainder of the project hasn’t been finalized. The buildings’ construction will be funded by G42, and the data center will be operated by OpenAI and tech company Oracle, G42 said. Other partners include global tech investor, AI/GPU chip maker Nvidia and network-equipment company Cisco.

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Softbank and ASI:

Not wanting to be left behind, SoftBank, led by CEO Masayoshi Son, has made massive investments in AI and has a bold vision for the future of AI development. Son has expressed a strong belief that Artificial Super Intelligence (ASI), surpassing human intelligence by a factor of 10,000, will emerge within the next 10 years.  For example, Softbank has:

• Significant  investments in OpenAI, with planned investments reaching approximately $33.2 billion. Son considers OpenAI a key partner in realizing their ASI vision.
• Acquired Ampere Computing (chip designer) for $6.5 billion to strengthen their AI computing capabilities.
• Invested in the Stargate Project alongside OpenAI, Oracle, and MGX. Stargate aims to build large AI-focused data centers in the U.S., with a planned investment of up to $500 billion. 

 Son predicts that AI will surpass human-level cognitive abilities (Artificial General Intelligence or AGI) within a few years. He then anticipates a much more advanced form of AI, ASI, to be 10,000 times smarter than humans within a decade. He believes this progress is driven by advancements in models like OpenAI’s o1, which can “think” for longer before responding. 

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Super High Salaries for AI Researchers:

Salaries for A.I. experts are going through the roof and reaching the stratosphere.  OpenAI, Google DeepMind, Anthropic, Meta, and NVIDIA are paying over $300,000 in base salary, plus bonuses and stock options. Other companies like Netflix, Amazon, and Tesla are also heavily invested in AI and offer competitive compensation packages.

Meta has been offering compensation packages worth as much as $100 million per person. The owner of Facebook made more than 45 offers to researchers at OpenAI alone, according to a person familiar with these approaches.  Meta’s CTO Andrew Bosworth implied that only a few people for very senior leadership roles may have been offered that kind of money, but clarified “the actual terms of the offer” wasn’t a “sign-on bonus. It’s all these different things.”  Tech companies typically offer the biggest chunks of their pay to senior leaders in restricted stock unit (RSU) grants, dependent on either tenure or performance metrics.  A four-year total pay package worth about $100 million for a very senior leader is not inconceivable for Meta. Most of Meta’s named officers, including Bosworth, have earned total compensation of between $20 million and nearly $24 million per year for years.

Meta CEO Mark Zuckerberg on Monday announced its new artificial intelligence organization, Meta Superintelligence Labs, to its employees, according to an internal post reviewed by The Information. The organization includes Meta’s existing AI teams, including its Fundamental AI Research lab, as well as “a new lab focused on developing the next generation of our models,” Zuckerberg said in the post. Scale AI CEO Alexandr Wang has joined Meta as its Chief AI Officer and will partner with former GitHub CEO Nat Friedman to lead the organization. Friedman will lead Meta’s work on AI products and applied research.

“I’m excited about the progress we have planned for Llama 4.1 and 4.2,” Zuckerberg said in the post. “In parallel, we’re going to start research on our next generation models to get to the frontier in the next year or so,” he added.

On Thursday, researcher Lucas Beyer confirmed he was leaving OpenAI to join Meta along with the two others who led OpenAI’s Zurich office. He tweeted: “1) yes, we will be joining Meta. 2) no, we did not get 100M sign-on, that’s fake news.” (Beyer politely declined to comment further on his new role to TechCrunch.) Beyer’s expertise is in computer vision AI. That aligns with what Meta is pursuing: entertainment AI, rather than productivity AI, Bosworth reportedly said in that meeting. Meta already has a stake in the ground in that area with its Quest VR headsets and its Ray-Ban and Oakley AI glasses.

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VC investments in AI are off the charts:

Venture capitalists are strongly increasing their AI spending. U.S. investment in A.I. companies rose to $65 billion in the first quarter, up 33% from the previous quarter and up 550% from the quarter before ChatGPT came out in 2022, according to data from PitchBook, which tracks the industry.

This astounding VC spending, critics argue, comes with a huge risk. A.I. is arguably more expensive than anything the tech industry has tried to build, and there is no guarantee it will live up to its potential. But the bigger risk, many executives believe, is not spending enough to keep pace with rivals.

“The thinking from the big C.E.O.s is that they can’t afford to be wrong by doing too little, but they can afford to be wrong by doing too much,” said Jordan Jacobs, a partner with the venture capital firm Radical Ventures.  “Everyone is deeply afraid of being left behind,” said Chris V. Nicholson, an investor with the venture capital firm Page One Ventures who focuses on A.I. technologies.

Indeed, a significant driver of investment has been a fear of missing out on the next big thing, leading to VCs pouring billions into AI startups at “nosebleed valuations” without clear business models or immediate paths to profitability.

Conclusions:

Big tech companies and VCs acknowledge that they may be overestimating A.I.’s potential. Developing and implementing AI systems, especially large language models (LLMs), is incredibly expensive due to hardware (GPUs), software, and expertise requirements. One of the chief concerns is that revenue for many AI companies isn’t matching the pace of investment. Even major players like OpenAI reportedly face significant cash burn problems.  But even if the technology falls short, many executives and investors believe, the investments they’re making now will be worth it.

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References:

https://www.nytimes.com/2025/06/27/technology/ai-spending-openai-amazon-meta.html

Meta is offering multimillion-dollar pay for AI researchers, but not $100M ‘signing bonuses’

https://www.theinformation.com/briefings/meta-announces-new-superintelligence-lab

OpenAI partners with G42 to build giant data center for Stargate UAE project

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