Big Tech bets big on AI future boom

Big Tech’s spending on artificial intelligence is accelerating at a fast pace, and companies are planning to shell out billions of dollars on the tech.

After record spending last year on the data centers that power artificial-intelligence systems, the top four tech companies all announced that they would further increase investment in 2025.

Microsoft, Alphabet, Amazon and Meta spent $246 billion in 2024, up from $151 billion in 2023. Their combined capital expenditure is projected to exceed $320 billion this year.

However, investor concerns have grown after the Chinese start-up DeepSeek introduced a cheaper AI model, triggering a $600 billion loss for Nvidia in one day. 

Microsoft and Alphabet also lost $200 billion in market value due to weaker-than-expected cloud growth and rising AI costs.

Despite the stock decline, tech companies see the promise in AI. Amazon CEO Andy Jassy called it the biggest shift since the internet. According to Google’s Sundar Pichai, the technology’s costs will come down with the increasing competition, fueling AI adoption.

What are companies planning?
Amazon plans to invest over $100 billion in infrastructure for the current year, mostly in AI-powered cloud services. The company reported that it spent nearly $26 billion on leased equipment for data centers that host AI applications in the final quarter of 2024. 

According to executives, Amazon will continue maintaining its Q4 spending this year.

Amazon’s first-quarter sales missed expectations, sending its stock down 4% in after-hours trading. It gained 40% in 2024.

Google and Microsoft stocks dropped 7% and 6%, respectively, due to slower cloud growth. However, Google parent Alphabet will increase investment to about $75 billion from $52.5 billion in 2024.

Microsoft, on the other hand, plans to spend $80 billion on AI data centers in the fiscal year ending in June.

Meta will not be left behind. CEO Mark Zuckerberg highlighted AI-driven service improvements, including a $60B–$65B capex boost. Since the company’s earnings report last week, Meta shares rose 5%.