Tech Giants Spend Big on AI, Investors Cheer

Tech companies, including Microsoft, Meta, and Alphabet, have increased their spending on artificial intelligence (AI) this quarter, leading to investor approval. Previously, investors were skeptical of the trend, but the significant investments have shown positive results. The increased spending on AI has contributed to the companies' growth and revenue, leading to investor cheer.

Tech giants have significantly increased their spending on artificial intelligence (AI) this quarter, leading to investor approval. Microsoft, Meta, and Alphabet, among others, have reported substantial capital expenditures (capex) in their latest financial disclosures, highlighting their commitment to AI development. This spending has contributed to their growth and revenue, reversing investor skepticism about the trend.

Microsoft reported a record-breaking $88.7 billion in capex for fiscal 2025, which exceeded its earlier projections [2]. Meta disclosed $30.7 billion in capex for the year-to-date, doubling its spending from the same period last year [1]. Alphabet's capex for the first two quarters of 2025 amounted to nearly $40 billion [1]. Amazon reported $55.7 billion in capex, with plans to spend $100 billion in the coming year on AI [1].

The increased spending on AI reflects the companies' investments in data centers, servers, and AI-ready chips to support cloud services, large language models, and AI-driven products. Microsoft CEO Satya Nadella stated that the company will spend over $100 billion on AI in the next fiscal year [1]. Meta plans to spend between $66 billion and $72 billion, while Alphabet aims to allocate $85 billion [1].

Investors have responded positively to these spending plans. Shares of Meta, Microsoft, and Alphabet rose after their earnings reports showed strong results, with Microsoft's market capitalization hitting $4 trillion the day after its report [1]. Even Apple, seen as lagging in AI development, signaled a significant boost in its AI spending, with its quarterly capex rising to $3.46 billion [1].

Smaller players are also capitalizing on the AI gold rush. OpenAI, known for its ChatGPT chatbot, raised $8.3 billion in investment, part of a planned $40 billion round of funding, valuing the startup at $300 billion [1].

The tech giants' massive spending on AI is larger than the European Union's quarterly spending on defense, underscoring the scale of their investments. Despite the significant sums, the spending plans issued by the world's largest technology companies have sparked a fear of missing out, driving the AI race to hundreds of billions in a single year [2].

References:
[1] https://www.theguardian.com/technology/2025/aug/02/big-tech-ai-spending
[2] https://english.cw.com.tw/article/article.action?id=4255