Microsoft and Meta are accelerating AI infrastructure. Microsoft balances capacity constraints via leasing, trading margins for growth. Meanwhile, Meta shifts to an aggressive strategy, leveraging rapid deployment and open-source models to secure future dominance.

Key Highlights

• Microsoft's Capacity Strategy: Microsoft uses third-party leasing to manage rapid AI revenue growth and capacity limits. While this impacts gross margins, the company is balancing leasing with self-built expansion.
• Meta's Strategic Shift: Moving from efficiency to aggressive investment, Meta strengthens its position by restructuring ad systems with AI and utilizing open-source models to commoditize the market.
• Rapid Deployment: Meta prioritizes speed by adopting industrial-grade structures for data centers, aiming for massive capacity release in the near future.

Table of Contents

1. Introduction
   • Microsoft and Meta’s Recent Major Investments Overlap Significantly in Location
2. The Hidden Computing Powerhouse: Microsoft's Invisible Expansion in the AI Investment Plateau Period
   • Microsoft Derives Most Revenue from AI, While Capital Intensity Stays Flat
   • Mount Pleasant Phase 1 Goes Live Next Year, Adding 450MW to Microsoft's Capacity
3. Meta Races to Catch Up in the AI Arms Race Despite Not Selling Cloud Services
   • Meta's Revenue Is Heavily AI-Driven, While Capital Intensity Rises Sharply
   • Meta Is Building Its Largest Data Center, Hyperion, Through a Joint Structure

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