Tech giants spend $380 billion on AI amid record investment race

San Francisco: Global technology giants Google, Microsoft, Meta, and Amazon have increased their capital expenditure forecasts, collectively committing over $380 billion this year to strengthen artificial intelligence infrastructure.

The companies announced the figures in their quarterly earnings reports this week, signaling that AI spending is accelerating across the industry.

Amazon, Microsoft, and Alphabet all raised their investment targets, while Meta narrowed its forecast but will still spend more than $70 billion.

Amazon said its capital spending will reach $125 billion, up from the earlier estimate of $118 billion. Alphabet lifted its projection to $91–93 billion, while Microsoft’s fiscal 2026 spending is expected to exceed $94 billion.

“We believe it to be a massive opportunity with strong long-term returns,” said Brian Olsavsky, Amazon’s chief financial officer.

Meta’s shares dropped 11% after analysts questioned the profitability of its “superintelligence” projects. Oppenheimer downgraded the stock, saying Meta’s AI focus lacks a clear revenue path.

Alphabet shares rose 2.5% after its earnings beat, while Microsoft’s stock fell 3% despite strong results.

The heavy AI investments come amid growing debate over whether such spending levels are sustainable. Analysts at Cantor Fitzgerald said total technology capex, including leases, could hit $140 billion this year, a 58% rise from 2024.

“It’s reflective of strong demand, but there appears no end in sight,” the analysts wrote.

Amazon Web Services reported a 20% rise in revenue to $33 billion, while Microsoft’s Azure climbed 40%, and Google Cloud grew 34% to $15.15 billion.

Despite investor caution, the companies maintain that artificial intelligence remains their biggest growth driver, with no sign of slowing down.