Tech giants’ AI strategy are shifting

Investors who follow the US stock market will undoubtedly notice that the five top tech giants are quietly undergoing a significant shift in their AI strategy.

Manifesto on AI strategy

In June 2025, Meta’s Mark Zuckerberg announced the establishment of a superintelligence lab, aiming to build a 50-person AGI team. A news release from Meta on July 21, 2025, indicated that Alexandr Wang, founder and former CEO of Scale AI, and Nat Friedman, former CEO of GitHub, would co-lead the Meta Superintelligence Lab. Around the Meta Superintelligence Lab, Meta has established an AI department with over 3,400 employees, including an AGI basic research team, an AI product team, a basic AI lab, and the Llama R&D team.

In a memo to all employees on July 24, 2025, Microsoft CEO Satya Nadella stated that there are no permanent winners in the technology industry, and that Microsoft must transform from a software factory to an intelligence engine, empowering every individual and organization to achieve whatever they need to achieve.

In a June 2025 interview with the Lex Fridman Podcast, Alphabet CEO Sundar Pichai stated, “By integrating Alphabet’s DeepMind and Google Brain teams, incorporating AI capabilities into search products, and driving innovations like Chrome and Waymo, we’re ensuring both stable business and cutting-edge innovation. Regarding progress toward AGI, he predicted that true AGI might be achieved after 2030.”

Apple CEO Tim Cook, in a rare in-person employee meeting on August 1st, stated that the scale of the AI revolution is “as big as, or even bigger than, the internet, smartphones, cloud computing, and apps.” He said, “Apple must be part of this revolution, and it will be. This is our opportunity. We will invest the resources to make it happen.” He added, “Every one of us is already using AI to some degree, and the entire company must be. If we don’t, we’ll be left behind.”

During Amazon’s second-quarter earnings call, CEO Andy Jassy stated, “I believe AI is the biggest technological shift of our generation. That’s a big statement, given that even in our relatively short lifetimes, we’ve already seen transformations like cloud computing, mobile internet, and even the internet itself. I still believe AI will be the biggest technological shift of our generation. It will not only transform every customer experience we know of, enabling customer experiences we could only dream of before, but it will also profoundly change the way we work. AI has the potential to have a significant impact on every area of work. We will embrace artificial intelligence and work tirelessly to shape it.”

Aggressive bids for AI startups

In June 2025, Meta agreed to acquire a 49% stake in Scale AI for $14.8 billion and poached its former CEO. In July 2025, Meta acquired the voice cloning startup Play AI. In August 2025, Meta announced the acquisition of WaveForms AI, a startup focusing on audio LLM, aiming to achieve emotional universal intelligence. The two founders joined its super intelligence team.

Alphabet acquired Character.AI in October 2024. On March 18, 2025, Alphabet announced it would acquire Wiz, a New York-based cloud security platform, in an all-cash transaction worth $32 billion. This would be the company’s largest acquisition ever. The acquisition represents an investment by Google Cloud aimed at accelerating two growing trends in the AI era: improved cloud security and the ability to leverage multiple clouds.

Alphabet and Amazon have both invested heavily in Anthropic, OpenAI’s biggest rival, to compete with Microsoft’s 49% stake in OpenAI.

Industry analysts have even bluntly stated that if Apple fails to accelerate its research and development, acquiring the AI startup Perplexity may be its only option. Perplexity is valued at approximately $14 billion. If Apple completes the transaction at the rumored $40 billion price tag, it would break its record for largest acquisition ever (its $3 billion acquisition of Beats in 2014).

AI talents poach is fierce

On July 5th, Zuckerberg offered a four-year, $300 million package to top researchers, with total compensation exceeding $100 million in the first year. The backgrounds of Meta’s superintelligence team have been revealed, revealing that 40% of them came from OpenAI, hindering the launch of OpenAI’s ChatGPT 5.0. They also poached Apple’s top AI executive and three of his senior executives; 50% of the team members have ties to China. The most striking example was Zuckerberg’s lavish spending on Matt Deitke, a 24-year-old Silicon Valley rising star, whose four-year compensation exceeded approximately $250 million. Alexandr Wang, founder and former CEO of Scale AI, joined Meta to lead the Meta Superintelligence Lab, leaving the rest of Scale AI behind.

Coincidentally, in July 2025, Windsurf’s CEO and core technical team defected to Alphabet, abandoning nearly 200 employees.

Job cuts or freezes to free up funds for AI

Fortune magazine reports that tech giants including Microsoft, Google, Meta, IBM, and PwC are cutting thousands of jobs to free up funds and space for AI investments. The focus isn’t just on replacing human labor, but also on developing AI-centric growth strategies.

The reality behind these layoffs is more complex. These companies are freeing up capital to allow AI to replace human labor. Companies need funds to invest in AI, and some layoffs are actually recruiting new AI-related talent. Many tech CEOs have also acknowledged that automation is indeed approaching white-collar workers.

Many companies, including Amazon, are flattening their management teams and prioritizing technical positions over administrative ones. IBM CEO Arvind Krishna has warned that approximately 30% of back-office jobs will be impacted by AI in the coming years. IBM has already cut approximately 8,000 jobs in human resources and other departments, while also hiring more engineers and salespeople, suggesting a shift in demand for positions requiring creativity and complex decision-making skills.

To dedicate more resources to its AI transformation, tech giant Oracle announced it will lay off 101 Seattle-based employees, following layoffs in August. This is the second layoff notice Oracle has filed in Seattle in the past month. This brings the total number of layoffs Oracle has made in Seattle to 262. While the state’s layoff notice only covers layoffs in the Seattle area, Oracle employees in other states have shared their layoffs on LinkedIn. This includes directors, CEOs, and vice presidents across cloud computing, marketing, engineering, operations, and sales, at all levels. Even those with seven, 13, 18, and 20 years of service have left.

Marc Benioff, CEO of software giant Salesforce, recently confirmed that the company has cut 4,000 jobs and discussed how AI can help companies reduce their headcount. Benioff revealed the 4,000 layoffs in a podcast interview that aired last Friday. Discussing the impact of AI on Salesforce’s operations, he said, “I’ve reduced the headcount from 9,000 to about 5,000 because I’m reducing the headcount.”

The actions of these tech giants also mean that as AI automation rapidly replaces repetitive work, job security becomes a major issue, and highly repetitive positions face the risk of being eliminated, while positions focusing on AI development and strategic planning tend to expand.

Making profits and laying off to AI

With the exception of Apple, which is less pronounced, the other four tech giants have been making profits while simultaneously laying off employees to finance staggering capital expenditures during the AI boom of the past three years. Investors welcome layoffs, as they generally result in immediate savings for companies. Tech giants, in turn, use the savings from these layoffs to recruit AI-savvy talent. Rising capital expenditures are a recurring theme across the technology sector, with internet giants striving to cut costs to raise funds for the expensive data centers they compete to build to run large AI models and workloads.

Microsoft’s CEO’s open letter reveals the “hard truth”: the company is profitable, yet layoffs are still imminent. Microsoft will lay off approximately 6,000 employees worldwide on July 13th. Washington State accounts for approximately one-third of the total layoffs, with software engineers being the largest category to receive layoff notices, representing over 40% of the 2,000 positions eliminated.

Microsoft announced that it would lay off 9,000 employees. This is the fifth layoff in three years, with a total of 15,000 employees.　On July 13th, Nadella, in an internal open letter defending the 9,000 employee layoffs, emphasized that the company was “more successful than ever” yet still required job cuts. Nadella repeatedly mentioned “unlearning old knowledge” and “learning new skills,” suggesting that some employees’ skills were outdated. Analysts say that profit-based layoffs have become the new normal, and this memo effectively serves as a “weather forecast” for the entire software industry, foreshadowing the impending dramatic changes in the industry driven by the impact of AI.

In its second-quarter earnings report, Alphabet reported that Google had a total workforce of just over 187,000 as of the end of June. The company laid off approximately 6% of its workforce in early 2023, subsequently implementing layoffs across multiple departments and offering buyouts to employees starting at the beginning of the year.

At a mid-July all-hands meeting, Alphabet CEO urged employees to further leverage artificial intelligence (AI) to improve productivity. He stated at the meeting that whenever companies face significant investment during extraordinary times, they often expand their workforce to cope. However, in the AI era, companies must leverage this transformation to boost productivity and achieve greater success. “We’re competing with other companies around the world, and some of them are taking this opportunity to make their employees more productive, so I think it’s crucial to focus on that,” he said.

In June, Amazon CEO Andy Jassy said the company’s headcount would shrink over the next few years as it adopts more generative AI tools and AI agents. In an email to employees, Jassy wrote that employees should learn how to use AI tools and experiment to explore “how to get more work done in smaller teams.”

Oracle also laid off employees in its strategic cloud division in mid-August 2025, the latest cost-control measure as the company invests heavily in artificial intelligence infrastructure. People familiar with the matter said affected employees were told their positions had been eliminated, with some layoffs related to performance issues; however, the division continues to recruit talent in artificial intelligence.

Closing words

The wave of layoffs in the tech industry continued into 2025. According to Layoffs.fyi, an independent layoff tracker, 549 companies laid off more than 150,000 employees last year. So far this year, over 22,000 tech employees have been laid off, with a staggering 16,084 layoffs in February alone.

Here is the company list of companies did layoff.

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