Microsoft and Meta are making significant workforce reductions to redirect resources toward artificial intelligence. Meta plans to cut about 10% of its staff, or roughly 8,000 employees, with layoffs starting May 20, and will close about 6,000 open positions. Microsoft is offering voluntary buyouts to up to 7% of its US workforce, affecting around 8,700 workers—a first for the company since its founding in 1975. Both CEOs have linked the cuts to AI: Meta's Mark Zuckerberg said AI is making some hiring unnecessary and predicted half of the company's coding could be done by AI within a year, while Microsoft's Satya Nadella cited major productivity gains from AI.
These job cuts come as both companies ramp up AI spending. Meta's expenses on infrastructure and AI experts are expected to reach $169 billion in 2026, while Microsoft is investing billions in data centers for cloud computing and AI systems like Copilot. The broader AI investment wave is massive: four companies alone committed $364 billion to AI in fiscal year 2025, funding data centers, chips, power development, and cloud infrastructure. According to Fidelity, AI has accounted for roughly 60% of recent economic growth. Dan Ives of Wedbush Securities compares the AI trade to being in the third inning of a baseball game, suggesting substantial room for growth.
On the hardware side, Intel aims for a trillion-dollar valuation with its new 18A process node. The company has shipped Panther Lake, the first processor built on 18A, and major cloud customers like Microsoft and AWS are engaging with it for custom AI silicon, with volume commitments expected in the second half of 2026. Intel's custom AI processor business reached a $1 billion annualized run rate in Q4 2025, and analysts model Intel capturing 3% to 5% of a $100 billion custom AI chip market by 2028. Meanwhile, Micron reported Q1 FY26 revenue of $13.6 billion, with data center sales making up 60% of total revenue, and is investing $100 billion in a New York megafab and $20 billion in FY26 capital spending to meet AI memory demand. Applied Optoelectronics delivered FY25 revenue of $455.7 million, an 83% year-over-year growth, and plans to expand laser capacity by 350% by the end of 2027.
In the legal arena, the Department of Justice has joined Elon Musk's xAI in a lawsuit to block Colorado's first-in-the-nation AI antidiscrimination law, SB24-205, set to take effect June 30. DOJ attorneys argue the law forces AI systems to discriminate based on race, sex, and religion, violating the 14th Amendment. xAI's lawsuit claims the law is unconstitutionally vague and would force its AI chatbot Grok to promote the state's ideological views. Colorado Attorney General Phil Weiser has no comment on the active litigation.
SoundHound AI has made two acquisitions to expand its capabilities. The company agreed to buy LivePerson for $43 million in equity, adding AI messaging for customer engagement, and also acquired AIs, which provides AI-powered music recognition technology that lets users identify songs with just a few seconds of audio. Both deals are expected to boost SoundHound's sales and provide new revenue streams. In the wearable AI space, Ambiq Micro, which makes ultra-low power semiconductor chips for wearable devices, held its IPO in July 2025 and has a market capitalization of $746 million. The company has sold about 290 million devices and works with customers like Google and Garmin. A survey by eToro found that 44% of Gen Z investors and 42% of millennials use chatbots to make investment decisions, compared to 24% of baby boomers and 21% of silent generation investors, with 71% of chatbot users feeling more confident in their decisions.
Key Takeaways
- Meta plans to cut about 10% of its workforce (roughly 8,000 employees) starting May 20, and will close about 6,000 open positions.
- Microsoft is offering voluntary buyouts to up to 7% of its US workforce (around 8,700 workers), a first for the company since 1975.
- Meta CEO Mark Zuckerberg said AI is making some hiring unnecessary and predicted half of the company's coding could be done by AI within a year.
- Four companies alone committed $364 billion to AI investment in fiscal year 2025, funding data centers, chips, power development, and cloud infrastructure.
- Intel has shipped Panther Lake, its first processor built on the new 18A process node, with volume commitments from cloud customers expected in the second half of 2026.
- Micron reported Q1 FY26 revenue of $13.6 billion, with data center sales making up 60% of total revenue, and is investing $100 billion in a New York megafab.
- Applied Optoelectronics delivered FY25 revenue of $455.7 million (83% year-over-year growth) and plans to expand laser capacity by 350% by the end of 2027.
- The Department of Justice joined xAI in a lawsuit to block Colorado's AI antidiscrimination law (SB24-205), arguing it violates the 14th Amendment.
- SoundHound AI acquired LivePerson for $43 million in equity and also bought AIs, an AI-powered music recognition company.
- A survey by eToro found that 44% of Gen Z investors and 42% of millennials use chatbots for investment decisions, with 71% of chatbot users feeling more confident.
Microsoft and Meta cut jobs to fund AI growth
Microsoft and Meta announced job cuts and buyouts that could affect up to 23,000 workers. The tech giants are spending heavily on building AI systems. Meta plans to cut about 10% of its staff, or roughly 8,000 employees, starting May 20. Microsoft is offering voluntary buyouts to about 7% of its US workforce. Both companies say the cuts help them invest more in AI technology.
Meta and Microsoft cut thousands of jobs to invest in AI
Meta and Microsoft announced large staff reductions as they spend heavily on artificial intelligence. Meta will cut about 10% of its workforce, or nearly 8,000 employees, starting May 20. Microsoft is offering voluntary buyouts to about 7% of its workers. Meta CEO Mark Zuckerberg said AI is making some hiring unnecessary and that half of the company's coding could be done by AI within a year. Microsoft CEO Satya Nadella said AI has led to major productivity gains. The job cuts come as tech workers worry that AI could replace them.
Meta and Microsoft cut jobs as AI investments rise
Meta Platforms and Microsoft announced workforce cuts on Thursday as they increase spending on artificial intelligence. Meta plans to cut about 10% of its workforce, or roughly 8,000 employees, and close about 6,000 open positions. The layoffs will take place on May 20. Microsoft will offer voluntary buyouts to up to 7% of its US workforce. Both companies are investing heavily in AI infrastructure and data centers.
Meta and Microsoft cut jobs to focus on AI development
Meta announced plans to lay off about 8,000 employees, or about 10% of its workforce, to focus on AI development. Microsoft is offering voluntary early retirement buyouts for around 8,700 workers, or about 7% of its workforce. Meta is investing heavily in AI, with expenses on infrastructure and AI experts expected to reach $169 billion in 2026. Microsoft is spending billions on data centers for cloud computing and AI systems like Copilot. The early retirement buyout program is a first for Microsoft since it was founded in 1975.
SoundHound AI buys LivePerson to boost sales and AI tools
SoundHound AI, a company that makes voice-enabled AI services, has agreed to buy LivePerson for $43 million in equity. LivePerson specializes in AI messaging for customer engagement. SoundHound AI expects the acquisition to significantly boost its sales. The deal will help SoundHound offer more ways for companies to interact with customers beyond phone calls.
SoundHound AI buys music recognition company AIs
SoundHound AI has acquired a company called AIs, which provides AI-powered music recognition technology. The technology lets users identify songs and artists with just a few seconds of audio. The acquisition gives SoundHound a major boost in the music recognition space and provides a new revenue stream. The deal shows SoundHound's commitment to innovation and expansion.
Dan Ives says AI trade is still in early innings and bullish
Dan Ives, Global Head of Technology Research at Wedbush Securities, says AI demand is expanding across the tech industry. He notes strong capital spending, cloud growth, and chip shortages support a bullish outlook for stocks. Ives compares the AI trade to being in the third inning of a baseball game, suggesting there is still much room for growth.
Micron and Applied Optoelectronics are key AI bottleneck stocks
Micron reported Q1 FY26 revenue of $13.6 billion, with data center sales making up 60% of total revenue. The company is investing $100 billion in a New York megafab and $20 billion in FY26 capital spending to meet AI memory demand. Applied Optoelectronics delivered FY25 revenue of $455.7 million, an 83% year-over-year growth, and plans to expand laser capacity by 350% by the end of 2027. Both companies are positioned as critical suppliers for AI infrastructure, with Micron making HBM chips and Applied Optoelectronics making transceivers and lasers for data centers.
Justice Department joins xAI to block Colorado AI law
The Department of Justice joined Elon Musk's xAI in a lawsuit to block Colorado's first-in-the-nation AI antidiscrimination law. The law, SB24-205, is set to take effect June 30. DOJ attorneys argue the law forces AI systems to discriminate based on race, sex, and religion, violating the 14th Amendment. xAI's lawsuit claims the law is unconstitutionally vague and would force its AI chatbot Grok to promote the state's ideological views. Colorado Attorney General Phil Weiser has no comment on the active litigation.
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Young investors use AI chatbots for investment decisions
A survey by investment platform eToro found that 44% of Gen Z investors and 42% of millennials use chatbots to make investment decisions. Only 24% of baby boomers and 21% of silent generation investors do the same. The survey of 10,000 investors showed that 71% of chatbot users felt more confident in their investment decisions. eToro CEO Yoni Assia said investors want personalized advice and chatbots can provide that.
AI investment is bigger than most investors realize
Four companies alone committed $364 billion to AI investment in fiscal year 2025, funding data centers, chips, power development, and cloud infrastructure. AI has accounted for roughly 60% of recent economic growth, according to Fidelity's research. The next phase of AI value creation is shifting from hardware to customer-facing applications and agentic AI systems that execute tasks autonomously. Agentic AI is expected to represent 10% to 15% of IT spending in 2026, and 33% of enterprise software will include it by 2028. AI video is also emerging as an overlooked revenue layer, transforming video from a passive medium into an interactive tool.
Intel aims for trillion-dollar valuation with AI chips
Intel has shipped Panther Lake, the first processor built on its new 18A process node. Major cloud customers like Microsoft and AWS are engaging with 18A for custom AI silicon, with volume commitments expected in the second half of 2026. Intel's server CPU volumes grew in the mid-20% range in early 2026, and its custom AI processor business reached a $1 billion annualized run rate in Q4 2025. Analysts model Intel capturing 3% to 5% of a $100 billion custom AI chip market by 2028, which could help the company reach a trillion-dollar market cap.
Two under-the-radar wearable AI stocks analysts like
Northland analyst Gus Richard says wearable AI technology is in the early stages of mass adoption. The wearable technology market was 500 million units in 2024, a $140 billion device market. Ambiq Micro, based in Austin, Texas, makes ultra-low power semiconductor chips for wearable devices. The company has sold about 290 million devices and works with customers like Google and Garmin. Ambiq held its IPO in July 2025 and has a market capitalization of $746 million.
Sources
- Microsoft and Meta announce workforce reductions amid heavy AI investment
- Microsoft and Meta announce sweeping layoffs as they spend big on AI
- Meta, Microsoft announce workforce cuts amid rising AI investments
- Meta, Microsoft purge jobs amid AI build-up
- Is SoundHound AI's Latest Acquisition a Game Changer for the Stock?
- Is SoundHound AI's Latest Acquisition a Game Changer for the Stock?
- Dan Ives: AI trade is in the third inning and that is bullish
- 2 'AI Bottleneck Stocks' That Could Continue Their Heroic Run For Investors
- Justice Department joins Elon Musk’s xAI in effort to block Colorado AI antidiscrimination law
- Stop taking notes forever thanks to this $30 AI-powered note-taking app
- Consumers turn to AI for investment decisions
- The AI Investment Playbook Is Bigger Than Most Investors Realize
- Intel Pursues Trillion-Dollar Valuation Through AI Chips
- 2 Under-the-Radar Wearable AI Stocks Analysts Are Bullish On
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