Tech Megacaps Embrace AI Spending, Investors Cheer

Investors are cheering as tech megacaps such as Microsoft, Meta Platforms, and Alphabet increase their spending on AI. This shift in investor sentiment marks a departure from previous concerns about the trend of big tech companies investing heavily in AI. The surge in AI spending is expected to drive growth and innovation in the tech industry.

Title: Big Tech's AI Spending Surge: Investors Cheer Amid Growth and Innovation

Investors are expressing optimism as tech megacaps such as Microsoft, Meta Platforms, and Alphabet significantly increase their spending on artificial intelligence (AI). This shift in investor sentiment marks a notable departure from previous concerns about the trend of big tech companies investing heavily in AI. The surge in AI spending is expected to drive growth and innovation in the tech industry.

According to recent financial disclosures, the tech giants have already spent substantial sums on AI in 2025. Microsoft, for instance, has allocated $30.7 billion to date, doubling its year-to-date capital expenditure from the same period in 2024 [1]. Meta has also doubled its capital expenditure, spending $17 billion in the latest quarter alone, while Alphabet has reported nearly $40 billion in capex for the first two quarters of the current fiscal year [1]. Amazon has spent $55.7 billion on AI-related investments [1].

The tech giants are planning to further escalate their spending in the coming fiscal year. Microsoft aims to spend $100 billion on AI in 2025, while Alphabet has estimated $85 billion, and Meta expects to spend between $66 billion and $72 billion [1]. Amazon has estimated that its 2025 expenditure would come to $100 billion, focusing on its Amazon Web Services (AWS) division, which analysts expect to amount to $118 billion [1]. In total, the four tech companies will spend more than $400 billion on capex in the coming year [1].

These investments are not without their benefits. Microsoft's Azure cloud computing business and its Copilot AI tools have shown significant growth, generating more than $75 billion in sales and boasting over 100 million users in the last fiscal year [2]. Alphabet's Gemini AI assistant app has more than 450 million monthly active users, while OpenAI's ChatGPT has around 500 million weekly active users [2]. These figures underscore the potential for AI to become a primary growth engine for these companies.

Investors are increasingly confident that these investments will yield positive returns. Microsoft shares rose more than 6% on Thursday, with the Windows maker crossing $4 trillion in market value [2]. Meta was up even more, rising 12.2% to a record high and on course to add around $200 billion to its market value of about $1.75 trillion [2]. Amazon gained about 1% [2]. These positive reactions from investors suggest that they are satisfied with the companies' AI strategies and the potential for future growth.

While the tech giants are spending more on AI, the returns are also rising. AI played a bigger role in driving demand across internet search, digital advertising, and cloud computing in the April-June quarter, powering revenue growth at technology giants Microsoft, Meta, and Alphabet [2]. The companies' increased spending is aimed at meeting soaring AI services demand and easing capacity shortages [2].

In conclusion, the surge in AI spending by tech megacaps is not only expected to drive growth and innovation but also to reassure investors that these investments are worthwhile. The tech giants' increased spending on AI reflects a strategic shift towards leveraging the technology to drive future growth and maintain their competitive edge.

References:
1. [1] https://www.theguardian.com/technology/2025/aug/02/big-tech-ai-spending
2. [2] https://finance.yahoo.com/news/big-tech-may-breaking-bank-084837348.html