Amazon, Microsoft, Alphabet and Meta told investors they will allocate at least $720 billion to capital expenditures this year, with the bulk earmarked for AI infrastructure. Those plans sit on top of commitments exceeding $1 trillion for the next several years, according to statements made during their recent earnings calls. The companies framed the outlays as essential to scaling the data-center capacity required for generative-AI workloads.
The scale of those commitments rattled Wall Street, triggering a sharp sell-off in technology shares that later eased as investors turned to the upcoming midterm elections. Analysts noted that regulatory uncertainty, including potential moratoriums on new data centres, could temper future spending. Despite the brief rebound, market participants remain uneasy about when the massive outlays will translate into measurable profit.
Top-line revenue continues to climb, yet the earnings calls revealed a disconnect between growth and AI spend. Amazon reported its fastest quarterly growth in five years, Meta’s advertising revenue surged, and Google Cloud’s revenue more than doubled year over year. Nonetheless, executives admitted that AI-related expenditures have yet to generate a comparable return, prompting investors to question the sustainability of the current trajectory.
Alphabet’s senior vice president and chief business officer Philipp Schindler told analysts that the surge in AI Mode queries has lowered overall monetisation, a point he made during the company’s earnings call, as reported by The Verge. Search-ad revenue grew 12 percent in the quarter, down from a 17 percent increase a year earlier. Alphabet plans $195-205 billion in capital spending this year and signalled a further rise in 2027, according to CFO Anat Ashkenazi.
Amazon’s chief executive Andy Jassy described the $220 billion capital budget as a ‘once in a lifetime opportunity’ to push the firm toward a trillion-dollar valuation, a comment recorded in the earnings briefing. He also indicated that 2027 spending would be meaningfully higher than this year’s level. Meta projects $135-145 billion in capex for the current year and, while it did not disclose exact 2027 figures, analysts expect an increase, especially as the company rolls out its Muse agentic-AI platform, which it says must reduce compute costs to become profitable.
Anthropic’s latest S-1 filing disclosed $17 billion of quarterly revenue alongside $17.5 billion in compute expenses, leaving a narrow margin. The startup also pledged roughly $900 billion for future compute and infrastructure, including plans to construct its own data centres. Google is supplying TPU chips to Anthropic, yet executives declined to confirm whether those sales will offset Google’s own AI-related capital outlays, a point raised during the earnings call. Microsoft, which had avoided debt for its AI buildout, announced a $25 billion bond issuance, a development noted by CFO Amy Hood on the company’s call.