Meta and Microsoft making billions as fight for future kicks off
Both Meta and Microsoft reported their quarterly earnings overnight and the billions continue to flow: more audience, ad impressions, revenue, and accelerating investment in the high-stakes race to AI supremacy.
I’ll get to the numbers shortly – they are very good – but first it’s worth considering Meta CEO Mark Zuckerberg’s point of view, as revealed overnight in his blog.
Mark Zuckerberg in an interview from May 2025
“The rest of this decade seems likely to be the decisive period for determining the path this technology will take, and whether superintelligence will be a tool for personal empowerment or a force focused on replacing large swaths of society.”
Zuckerberg is doing two things. First he is flagging what we should already know from the capex numbers this reporting season: the platforms believe this is the decisive moment in determining who owns the future.
Second, he is positioning Meta as pro-human and anti-job loss, implicitly painting his competitors – some of whom have spoken openly about mass lay-offs – as anti-human overlords.
Whether this positioning is successful is as important as the quarterly numbers. They tell a story of almost unimaginably rich pickings from business models in flux.
Around 3.5 billion people used one of the Meta apps – Facebook, Instagram, Messenger and Whats App – daily in June.
Meta’s ad impressions grew 11% year-on-year across the quarter, and the average price per ad increased 9%. The impression growth was driven by the Asia-Pacific region, apparently. Zuckerberg said that prices climbed on the back of AI-driven ad targeting and creative tools, with 5% more conversions on Instagram and 3% more on Facebook.
“On advertising, the strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ads system.”
The combined effect was advertising revenue of US$46.56 billion, up 21% YOY. That accounts for the vast majority of Meta’s revenue, which, with costs and taxes removed, left it with net income of US$18.3 billion for the quarter, up 36% from the year before.
Meta, like Google and Microsoft, is going to put more into capex than it first imagined, revising its lower-bound estimates for the full year to at least US$66 billion. It is going to spend something like US$30 billion more in 2025 than 2024, putting those vast sums into massive data centres with ancient Greek names.
Microsoft’s numbers are bigger than Meta’s, and almost as good. Its net income sat at US$27.2 billion for the quarter, up 24%. Mostly the revenue increases were driven by its cloud computing business, but there were contributions across the board. It’s easy to forget the tech giant has an advertising business – search and news advertising sat at US$3.6 billion for the quarter, up over $500m from the year before. Linkedin isn’t rolled into that, and it increased YOY too, up 9%.
Microsoft said in the investor call it was going to boost capex to around $30 billion for the next quarter, primarily to expand AI data centre capacity.
The numbers and growth being revealed this month are impressive, and speak to the digital platforms’ absolute dominance of the modern world. Which companies prevail and are permitted to continue that dominance may come down to which businesses have the most to spend.
No wonder Microsoft is making billions, just paid them and increase in yearly cost is a ransom.
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