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- On earnings calls this week, Big Tech companies reported significant AI spending.
- Each said the spending spree will continue into 2026 and be even bigger than previously reported.
- Some investors are concerned about the risks of an AI bubble.
Big Tech's AI gold rush isn't slowing down— it's getting more expensive.
Amazon, Google, Meta, and Microsoft all opened their wallets wider than ever this quarter, logging record-breaking capital expenditures on AI chips, servers, and data centers.
Microsoft was the top spender at nearly $35 billion, narrowly beating Amazon. Meta CEO Mark Zuckerberg said the company could increase its long-term asset spending, or capital expenditure (capex), by as much as 24% next year. Each company said it planned to spend even more on capex going forward.
A few recent deals exemplify this trend. Amazon this week opened an $11 billion data center in Indiana, part of its massive AI supercluster called Project Rainier, and said it would spend $5 billion on data centers in South Korea. Microsoft recently joined a consortium of investors, including BlackRock, Nvidia, and Abu Dhabi's MGX, to buy 50 data centers in the US and Latin America Aligned Data Centers for $40 billion. Aligned operates 50 data centers in the US and Latin America.
Even Apple, a notoriously restrained spender compared to the other hyperscalers, told investors that it expects capital expenditure (capex) spending to increase in the next fiscal year.
Investors are watching closely: companies showing early AI payoffs, like Google, are being rewarded, while others — like Meta — are running out of time to prove the spending spree is worth it.
"After all the expensive hires and the capex ramp, Meta's grace period for showing investors something on the non-core AI side is nearly up," Bernstein senior analyst Mark Shmulik said Wednesday in a research note.
The question for investors: which of these giants can turn that spending into actual AI returns — and which are just building costlier foundations for the future?
Microsoft spent a record $34.9 billion in capex in the first quarter of its fiscal year.
Capital expenditures in the company's most recent fiscal quarter were driven by growing demand for cloud and AI offerings, Microsoft CFO Amy Hood said Wednesday.
The nearly $35 billion in spending represents a 74% increase from the same time period last year.
Roughly half of that spend went primarily to GPUs and CPUs, which Hood referred to as "short-lived assets."
Microsoft spent $11.1 billion on data center leasing alone for the quarter.
The company previously forecasted $30 billion in capex for the quarter.
Amazon had the second biggest spend with plans to nearly triple it next year
Amazon spent $34.2 billion in capex in the third quarter. The world's largest cloud provider said it expects to spend $125 billion this year in capex, up significantly from $83 billion in 2024.
Amazon CFO Brian Olsavsky said the company plans to spend even more on capex in 2026 as it looks to double its data center capacity in the next two years.
Meta plans to double its 2024 spend this year
Meta spent $19.4 billion on capex in the third quarter, and is projecting 'notably higher growth' next year. Meta also adjusted its capex guidance range for 2025 from $70 billion to $72 billion, up from its previous estimate of $66 billion to $72 billion last quarter.
That's almost double the amount — $39.2 billion total — Meta spent on capex in 2024.
"We're seeing very high demand for additional compute," CEO Mark Zuckerberg told investors on the company's third-quarter earnings call Wednesday.
The company expects to spend $116 billion to $118 billion on infrastructure costs next year, representing a 22% to 24% increase from 2025.
Meta is building its own data centers and contracting space through third parties. It recently raised $29 billion for its massive data center project in Louisiana from firms including Pacific Investment Management Company and Blue Owl Capital.
Google spent $24 billion in capex in the third quarter. Most of that went to AI.
CFO Anat Ashkenazi told investors on the company's earnings call Wednesday that the "vast majority" of capex was spent on AI infrastructure.
Approximately 60% of the spend went to chips and servers, while 40% went to networking equipment and data centers.
Google raised its capex guidance for the year, projecting a range of $91 billion to $93 billion, up from its previous estimate of $85 billion.
"We're continuing to invest aggressively due to the demand we're seeing from cloud customers, as well as the growth opportunities we see across the company," Ashkenazi said.
Google parent Alphabet's stock jumped yesterday after it reported a boost in revenue growth from its cloud division in the third quarter.
Wall Street seemed less concerned about its parent company's capex raise compared to those of its Big Tech peers.
The third quarter was a "pretty solid flex" for Google, "around the AI bull case," Barclays analysts said in a research note on Wednesday.
