Why Artificial Intelligence Is So Costly to Develop: QuickTake

Nearly 18 months into the generative AI frenzy, some of the biggest tech companies are proving that artificial intelligence can be a real revenue driver. But it’s also a huge money pit.

Microsoft Corp. and Alphabet Inc.’s Google reported surging cloud revenue with their latest quarterly results, as business customers spent more on their AI services. Meta Platforms Inc., while further behind in monetizing the technology, said its AI efforts have helped bolster user engagement and ad targeting.

To achieve these early gains, the three companies have spent billions to develop AI — and they plan to ramp up ...