Satya Nadella, CEO of Microsoft, said the spending was needed to overcome the capacity constraints that hampered the tech giant's ability to capitalize on AI.

Chinese AI startup DeepSeek's model led to increased scrutiny on Microsoft's AI spending.

The tech giants vow to barrel ahead despite the jolt from China’s DeepSeek.

DeepSeek is causing havoc throughout the AI industry. U.S.-based tech companies that have heavily invested in AI saw their stocks take a tumble this week after the China-based startup released a new AI model on par with OpenAI's latest model, yet much cheaper to train — plus, DeepSeek made it free and open source.

Microsoft Corp. and OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorized manner by a group linked to Chinese artificial intelligence startup DeepSeek,