Leaders at Microsoft and Meta told investors that China’s DeepSeek doesn’t harm their businesses and that they will still spend billions on AI data centers.

(Reuters) -Investors punished Microsoft with a 6% share drop on Thursday as hefty AI bets failed to drive a big increase in its cloud revenue, while Meta rose 4% after CEO Mark Zuckerberg assured Wall Street about growth with promises of a "really big year".

Mark Zuckerberg said this year will be a "defining" year for AI, announcing plans to spend over $60-$65 billion in capital expenditures.

Meta's Mark Zuckerberg has moved to encourage optimism after DeepSeek’s AI models sent out multiple shockwaves that rocked Wall Street.

Both Meta and Microsoft committed to huge investments in artificial intelligence, despite new Chinese software outperforming American rivals at a lower cost.

The tech giants are keeping capital spending plans in line as DeepSeek raises questions about future computing needs.

DeepSeek will not derail Microsoft and Meta spending a combined $US145bn ($232.3bn) on artificial intelligence this year, with Mark Zuckerberg steaming ahead with plans to build a data centre almost the size of Manhattan.

Meta CEO Mark Zuckerberg anticipates a transformative year for AI in 2025, aiming for over 1 billion users with Meta AI and significant advancements in data centers and GPU deployment, backed by a $60-65 billion investment in capex to enhance innovation and technology leadership.

In a meeting held Thursday, Meta's chief allayed fears of changes to the company's hybrid work policy.

Since toning down its Metaverse ambitions, Zuckerberg has turned to the omnipresent expanse of AI. If Meta leans too heavily on AI-generated posts, chatbots, and synthetic influencers, it risks overwhelming users once again with the noise.