AI lesson for Microsoft and Google: Spend money to make money

Google, Microsoft and Alphabet logos and AI Artificial Intelligence words are seen in this illustration taken, May 4, 2023. REUTERS/Dado Ruvic/Illustration

(Reuters) -Artificial intelligence is expected to pay off big for tech giants including Microsoft and Alphabet someday. But expect deeper investments before gains trickle to the bottom line, the companies said on Tuesday.

Microsoft said costs rose sharply as it built new data centers to support AI and that capital expenditures will continue to rise as it buys chips from the likes of Nvidia Corp to power those data centers.