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.

Microsoft CEO Satya Nadella believes that DeepSeek will inevitably help the American AI industry rather than hurt it. Microsoft chief executive Satya Nadella isn’t pressed about Chinese AI startup DeepSeek’s recent success.

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

Just a few hours after David Sacks claimed DeepSeek used OpenAI’s models to train its own models, Bloomberg Law reports that Microsoft is investigating

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.

Stocks rose Tuesday, led by tech. AI fears loom as Meta, Microsoft report earnings. Tesla faces policy risks. Fed decision, major earnings, and government cuts ahead.

Markets are looking for assurances that DeepSeek hasn't completely disrupted the AI investment thesis. They may be disappointed.

Meta (NASDAQ:META), and Tesla (NASDAQ:TSLA) are set to report their earnings after the bell, with investors closely watching AI-related capital expenditures.