Big Tech's AI Spending Spree Hits Trillion-Dollar Scale

Amazon, Alphabet, Meta, and Microsoft are planning to spend at least $720 billion on capital expenditures this year, with the bulk dedicated to AI infrastructure, as The Verge first reported. This surge is part of a broader investment strategy that includes at least $1 trillion in spending commitments arranged for future years.

Despite the massive buildout, The Verge reports that these companies have yet to generate significant profits from AI. This lack of immediate return triggered a sharp tech stock selloff last week, though prices began to recover following midterm elections where voters selected candidates favoring data center restrictions.

Individual company targets highlight the scale of the investment. Alphabet CFO Anat Ashkenazi stated the company plans to spend between $195 billion and $205 billion this year and intends to increase that spending "significantly" in 2027. Amazon CEO Andy Jassy announced plans to spend $220 billion this year—the largest in company history—and intends to spend "meaningfully more" in 2027. Meta's projected spending for this year is between $135 billion and $145 billion, and analysts at major financial institutions expect those figures to rise.

Some of this growth is already impacting core businesses. Alphabet Senior VP and Chief Business Officer Philipp Schindler acknowledged that growth in "AI Mode" queries has lowered monetization in Google's core Search business. While Search ad revenue grew 12% in the third quarter, that is a decline from the 17% growth rate seen during the same period last year.