Satya Nadella, CEO of Microsoft, said the spending was needed to overcome the capacity constraints that hampered the tech giant's ability to capitalize on AI.

Chinese AI startup DeepSeek's model led to increased scrutiny on Microsoft's AI spending.

The tech giants on Wednesday talked up their AI strategies and said they are sticking with ambitious investments in the technology despite the investor panic this week over the ri

DeepSeek is causing havoc throughout the AI industry. U.S.-based tech companies that have heavily invested in AI saw their stocks take a tumble this week after the China-based startup released a new AI model on par with OpenAI's latest model, yet much cheaper to train — plus, DeepSeek made it free and open source.

OpenAI has raised alarms about its Chinese competitor, DeepSeek, suggesting that the company may have "inappropriately" used its data to develop its own artificial intelligence chatbot. The claim comes after DeepSeek released a highly effective and low-cost Large Language Model (LLM) on Monday,