Three real takeaways from this week's Amazon and Apple earnings on AI

[WearyScholar]

Every major tech company updated Wall Street on its finances this week, and BBC's tech reporter Kali Hays pulled together three genuinely useful patterns out of the noise rather than just repeating the usual big number headlines, the first being that consumer facing AI chatbots still are not making meaningful money for anyone despite years of promises that they would

Google and Meta both posted some of their lowest ever free cash flow figures this quarter, Alphabet's free cash flow actually went negative on 118 billion dollars of revenue, the first time that has ever happened in the company's history as a public company, while Meta brought in 61 billion in revenue but kept only 784 million of free cash, and Meta's Reality Labs division specifically has lost close to 9 billion dollars in just the first half of this year alone

The second takeaway is that investors have clearly run out of patience with vague promises, Meta's stock dropped to its second lowest level in a year after Zuckerberg talked up a future AI agent and a plan to sell AI tools to other businesses, neither of which exists yet in any revenue generating form, while Microsoft's shares jumped to a six month high on the same earnings day because an actual analyst could point to real adoption numbers and revenue growth backing up its roughly 190 billion dollar AI spend, Amazon landed in a similar spot to Microsoft, negative cash flow and 220 billion in planned AI spending this year but its stock still hit a two month high because its other business lines are carrying the load

The third and most interesting point for anyone outside the finance world is that raw consumer demand for new tech genuinely has not gone away even if AI itself has not yet delivered the internet or electricity level revolution that executives keep promising, Google said 950 million people now use Gemini monthly, three times last year's number, and Apple said Mac, iPhone and iPad sales have actually been running ahead of its own expectations this year, so far ahead that Apple warned investors upcoming sales might slow simply because it cannot get enough chips to keep up with demand

Outgoing Apple CEO Tim Cook also confirmed the company already has plans to charge for heavier use of its upcoming Siri overhaul, which is getting built with help from Google's Gemini technology, based on feedback from user testing so far, and Cook did not hide his enthusiasm about it either, saying the company is off the charts excited about Siri AI and genuinely believes plenty of people will want to use it

Amazon and Apple just told us more about their AI plans - here are three things we learnedwww.bbc.co.uk

[Cole75]

Alphabet going cash flow negative for the first time ever as a public company is the number that should be the real headline out of this entire earnings season, that's an extraordinary milestone buried under a pile of other AI spending stats

[James78]

Meta getting punished for vague future promises while Microsoft got rewarded for showing actual adoption and revenue is exactly the market lesson every other AI spender should be taking away from this week, vague roadmap talk doesn't cut it anymore

[Drogba32]

The Apple angle is honestly the most surprising part of this whole piece, a company that's been mocked for supposedly falling behind on AI just posted demand so strong it's warning about chip shortages, that's not the story people expected going into this earnings cycle

[PlanckLimit]

Charging extra for heavier Siri usage feels like a preview of where this whole industry ends up, free tier chatbots for basic stuff, paywalled tiers for anything useful, that's probably the business model every one of these companies eventually converges on

[FrostCandle]

Reality Labs losing almost 9 billion in six months is wild even by Meta's historical standards for that division, feels like the AI agent pivot might just be Meta trying to find literally any way to justify that level of ongoing burn

[Dylan]

What strikes me is how differently the market treated basically the same underlying fact pattern, heavy AI spend plus unclear near term payoff, Amazon and Microsoft got rewarded for it while Meta got punished, the difference really does seem to come down entirely to whether there's a credible growth story attached elsewhere in the business

[Paige_26]

The 950 million monthly Gemini users number deserves more attention than it's getting, tripling in a year is massive scale regardless of whether Google is actually monetizing those users effectively yet