Tech giants Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) and Meta Platforms (META) are massively increasing spending on artificial intelligence, with executives shrugging off concerns about the huge sums being wagered on the technology.
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Silicon Valley is doubling down on AI despite fears that China’s DeepSeek and others could be able to rival the U.S. without the same level of investment. Shares in AMZN and GOOGL both fell after announcing significant AI spending plans, as investors doubted whether it’s going to pay off.
AMZN Surprises with $100B Bet
AMZN bested rivals with a planned $100 billion investment in AI this year, the company signaled as it released its Fiscal first quarter results last night.
“AI represents, for sure, the biggest opportunity since cloud and probably the biggest technology shift and opportunity in business since the Internet,” said AMZN CEO Andy Jassy.
GOOGL had already surprised markets with the scale of its investment in AI. CEO Sundar Pichai said spending on data centers and servers would rise to $75 billion this year from $53 billion in 2024, a third above Wall Street estimates for the year.
It came as the company reported Fiscal Q4 capital expenditure rose to $14.3 billion, up from $11 billion.
Pichai defended the scale of spending, saying the AI opportunity was “as big as it comes.”
META and MSFT Already All-In
MSFT, whose Fiscal year runs differently to the rest, has said it would spend $80 billion AI infrastructure this year. Its Fiscal Q2 results showed it’s already spent $42 billion of the expected $80 billion.
META signaled its intention to spend “hundreds of billions” on AI over the coming years, with $60 billion $65 billion earmarked for 2025.
Combined, the four companies have reported capital expenditure of almost $250 billion in 2024 and forecast this to rise beyond $300 billion this year.
MSFT, GOOGL and META have projected combined capex of about $215 billion for their current fiscal years. AMZN did not break out a full year estimate yesterday, but indicated it would spend at least $100 billion, mainly on AI.
AMZN said that a measure of capex rose to a record of $26 billion in the final quarter of 2024, driven by spending on equipment for data centers that host AI applications. The company expects this level of spending to be maintained through Fiscal 2025.
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