The companies also lifted their guidance for capital expenditures, saying that they will spend more than what they anticipated.
This comes as companies including Microsoft, Meta, Alphabet and Amazon race to invest in and build infrastructure for what they have been touting as a limitless demand for AI services.
Amazon’s investment
Amazon Chief Financial Officer Brian Olsavsky said he expected full-year capital expenditures to be around $125 billion, and higher next year. However, he did not provide specific details on where Amazon will use this capex.
“We’ll continue to make significant investments, especially in AI,” Olsavsky said, adding, “We believe it to be a massive opportunity with the potential for strong returns on invested capital over the long term.”
“We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity,” CEO Andy Jassy said.
Alphabet bets on AI
Google parent Alpabet has also raised its capex forecast as it reported an earnings beat.
Alphabet now expects to budget $91 billion to $93 billion for capital expenditures this year, CEO Sundar Pichai told investors. This was up from its July capex forecast, which stood at $85 billion as tech majors rush to spend more on AI, a concept that experts have sounded warnings against.
Pichai said 2026 was likely to run an even larger bill.
Alphabet’s chief financial officer, Anat Ashkenazi, told analysts to expect a significant increase in the company’s capital expenditures next year.
What’s Meta’s goal?
Mark Zuckerberg’s Meta has been incorporating AI to its social media platforms, including Facebook, Instagram and WhatsApp.
On Wednesday, the company narrowed its capex guidance, saying it would spend between $70 billion and $72 billion this year, up from the earlier range of $66 billion to $72 billion.
Meta further said it would ensure capex growth is considerably faster in 2026 than it will this year, hinting at more spends.
“There’s a range of timelines for when people think that we’re going to get superintelligence,” Mark Zuckerberg said on a conference call with analysts.
“I think that it’s the right strategy to aggressively front-load building capacity, so that way we’re prepared for the most optimistic cases,” he added.
How is Microsoft pushing its AI goals?
Microsoft, which reported its Q1 results on Wednesday, has also seen an infrastructure spending to meet growing cloud services demand.
The technology giant reported a record capital expenditure of nearly $35 billion. In its earnings call, the company said that capex growth would accelerate in fiscal 2026, which started in July.
Last fiscal year, capex rose 45% to $64.55 billion, suggesting that it could grow to $94 billion in 2026, CFP Amy Hoods said.
The AI bubble
Big tech companies expected to spend about $3 trillion on infrastructure like data centres between now and the end of 2028, according to Morgan Stanley.
However, the rising AI spends, as well as skyrocketing valuations of tech companies and limited evidence of productivity gains for businesses adopting AI, has spooked investors already. Experts have warned of an AI bubble, saying that it could burst any time.
Key Takeaways
- Tech companies are collectively increasing their capital expenditures significantly to invest in AI infrastructure.
- Despite the optimism surrounding AI investments, experts are cautioning about the possibility of an AI bubble.
- The projected growth in capital expenditures indicates that tech firms are betting heavily on the future of AI.
