Tech Giants Boost AI Spending, Driving 57% Cloud Infrastructure Surge

Tech giants are intensifying their capital expenditure in the AI sector, driving a global cloud infrastructure competition to unprecedented heights. This trend is not limited to the major players but also involves numerous second-tier cloud providers who are increasingly investing in AI infrastructure, driven by the growing demand for AI services. The improved yield rate of NVIDIA's GB200 further supports this trend, enhancing the efficiency and cost-effectiveness of AI servers.

Morgan Stanley's latest report highlights that the combined capital expenditure of the four major U.S. cloud service providers—Amazon, Google, Meta, and Microsoft—is expected to reach 359 billion dollars in 2025, a 57% increase from the previous year. This trend is projected to continue, with expenditures reaching 454 billion dollars in 2026, a 26% increase. This significant investment underscores the intense competition and the growing importance of AI in the tech industry.

However, the market's focus should not be limited to these major players. Morgan Stanley emphasizes that there is significant potential demand from non-U.S. regions and second-tier cloud providers. These providers are actively expanding their AI infrastructure, and their potential order size for AI servers is substantial. This indicates that the AI server market is being undervalued, with growth opportunities extending beyond the major tech giants.

On the supply side, the yield rate of NVIDIA's GB200 chip is improving, which is crucial for meeting the growing demand for AI servers. This improvement in supply chain efficiency is expected to support the increasing orders for AI servers, further driving the growth of the AI server market. Additionally, the "Stargate" project, a collaboration between OpenAI, SoftBank, and Oracle, is moving forward with real-world supply chain interactions, particularly in the procurement of server racks. This project highlights the shift from order-based to project-based demand, indicating a significant leap in future requirements.

In summary, the AI server market is poised for substantial growth, driven by the intense capital expenditure of tech giants, the significant potential demand from non-U.S. regions and second-tier cloud providers, and the improved yield rate of NVIDIA's GB200. Morgan Stanley's optimism about the AI server market is well-founded, and investors should consider this sector for potential growth opportunities. The combination of strong global demand, undervalued growth areas, and improving supply chain conditions provides a solid foundation for the industry's continued upward trajectory in the coming years.