Tech giants plan $400B AI spending spree as infrastructure race heats up

Big tech companies have collectively spent $155 billion on artificial intelligence infrastructure in 2025 so far, exceeding the US government’s spending on education, jobs, and social services combined. This massive capital expenditure race is set to accelerate dramatically, with the four largest tech giants planning to spend over $400 billion on AI-related infrastructure in the coming fiscal year alone.

The big picture: Meta, Microsoft, Amazon, and Alphabet are locked in an unprecedented spending competition to build the data centers, servers, and semiconductor infrastructure needed to power AI services.

• Meta’s year-to-date capital expenditure reached $30.7 billion, doubling last year’s $15.2 billion figure.
• Alphabet, Google’s parent company, reported nearly $40 billion in capex for the first two quarters.
• Amazon disclosed $55.7 billion in spending.
• Microsoft plans to spend more than $30 billion in the current quarter alone, at least 50% more than the same period last year.

Why this matters: The scale of investment dwarfs other major government and private sector spending, with tech companies’ AI investments exceeding the European Union’s quarterly defense spending.

• These expenditures serve as a proxy for AI development since the technology requires massive investments in physical infrastructure like data centers, which need enormous amounts of power, water, and expensive semiconductor chips.
• The spending reflects the companies’ belief that AI represents an “expansive opportunity” worth hundreds of billions in potential returns.

What’s coming next: The four tech giants have announced plans for even more aggressive spending in the next fiscal year.

• Microsoft CEO Satya Nadella said the company plans to spend about $100 billion on AI.
• Meta projects spending between $66 billion and $72 billion.
• Alphabet increased its spending estimate to $85 billion, up from a previous $75 billion projection.
• Amazon’s 2025 expenditure is estimated at $100 billion, with analysts expecting Amazon Web Services alone to reach $118 billion.

Investor reaction: Rather than being concerned about the massive spending, Wall Street has rewarded companies that increased their AI investment projections.

• Microsoft’s market capitalization hit $4 trillion the day after reporting higher-than-expected capex plans.
• Shares in Microsoft, Google, and Meta all soared after their respective earnings calls disclosed increased AI spending.

What they’re saying: Tech executives are doubling down on their AI investment strategies despite the enormous costs.

• “We will continue to invest against the expansive opportunity ahead,” said Microsoft CFO Amy Hood.
• Apple CEO Tim Cook said the company is “significantly growing our investment” in AI and reallocating a “fair number” of employees to focus on artificial intelligence.

The competitive landscape: Even smaller players are trying to keep pace with the tech giants’ massive spending spree.

• OpenAI announced it raised $8.3 billion as part of a planned $40 billion funding round.
• The startup, whose ChatGPT launched the current AI boom in 2022, is now valued at $300 billion.
• Apple, previously seen as lagging in AI development, increased its quarterly capex to $3.46 billion from $2.15 billion in the same period last year.