The AI Boom That Won’t Quit: Big Tech’s $500 Billion Spending Spree

Wall Street just got another taste of the AI future – and it’s having mixed feelings… 

After reporting third-quarter earnings last week, Alphabet (GOOGL) and Amazon (AMZN) soared on surging AI demand, while Microsoft (MSFT) and Meta (META) slipped due to ballooning capital costs. It seems traders can’t decide whether to cheer the growth or fear the bill.

Indeed, as Big Tech’s capex spending outpaces sales, we’re seeing an ‘AI overbuild’ narrative taking hold.

But if you zoom out, the same “AI ROI” debate spooking investors is what’s fueling the next leg of the boom.

In the AI economy, capital spending is the top of the funnel. When the Big Four open the tap, every layer of the AI stack – from silicon to software – gets drenched.

Now that spigot is wide-open. And that torrent is far-reaching…

Why the AI Capex Flywheel Keeps Turning

When Big Tech spends $500 billion a year, that money cascades through the entire AI economy – from chipmakers like NVIDIA (NVDA) and AMD (AMD) to power and cooling suppliers like Vertiv (VRT) and Bloom Energy (BE)… and the countless software, automation, and robotics firms building on top of that infrastructure.

Every chip fab expansion, every cooling unit installed, every transformer upgraded all ties back to this capex supercycle.

That’s why we call it a supercycle, after all. It’s no temporary cash surge. It’s an ongoing restructuring of the world’s compute infrastructure, as big as the shift from mainframes to PCs, or from on-premises servers to the cloud.

Wall Street tends to panic about “AI fatigue.” That’s why, every time a company mentions ‘ROI uncertainty’ or ‘moderating growth,’ talking heads jump to the same conclusion: the boom is over.

But the numbers tell a different story.

Meta, Microsoft, Alphabet, Amazon – each is raising their spending.

If the companies with the best data, the most customers, and the deepest visibility into global AI demand are all deciding to ramp capex by 34% next year, that’s a flashing neon sign that the AI economy is accelerating.

Let’s do the math.

Capex Is the Fuel That Powers the AI Economy

Big Tech’s new spending plans make last year’s ‘AI splurge’ look small.

Based on the new commentary and updated capex plans from all four companies, here’s what our analysis suggests the spending picture looks like:

Estimated Capex

2025:

• Microsoft: $90 billion
• Meta: $71 billion
• Alphabet: $92 billion
• Amazon: $125 billion

Total: About $380 billion

2026:

• Microsoft: $140-plus billion
• Meta: $110-plus billion
• Alphabet: $110-plus billion
• Amazon: $150-plus billion

Total: $510-plus billion (34% year-over-year growth)

In other words, the Big Four are on track to spend more than half a trillion dollars on AI infrastructure next year.

To put that in perspective, that’s larger than the GDP of Sweden or the combined annual defense budgets of every NATO country (excluding the U.S.).

It’s an investment tsunami; and every AI chipmaker, data center operator, and software platform is riding the wave.

To see what this supercycle really looks like, follow the money – straight to the Big Four driving it.