In 2025, America’s biggest companies have been locked in a spending race, pouring $155 billion into artificial intelligence development—more than the U.S. government has spent so far this fiscal year on education, training, employment, and social services combined.
Recent financial reports from Silicon Valley’s top players suggest this spending spree is about to escalate, reaching hundreds of billions in a single year. Over the past two weeks, Meta, Microsoft, Amazon, and Alphabet (Google’s parent company) revealed their quarterly earnings, each reporting tens of billions in capital expenditures—money spent on acquiring or upgrading physical assets like data centers, which are crucial for AI development.
Capital expenditures (capex) serve as a key indicator of AI investment, as the technology demands massive infrastructure, including power-hungry data centers and expensive semiconductor chips. Google, for example, stated that its capex primarily funds AI-related servers and data centers.
Meta’s year-to-date capex hit $30.7 billion, double last year’s $15.2 billion. In the latest quarter alone, it spent $17 billion, up from $8.5 billion in 2024. Alphabet reported nearly $40 billion in capex for the first half of the fiscal year, while Amazon reached $55.7 billion. Microsoft plans to spend over $30 billion this quarter on AI data centers—a 50% increase from last year and surpassing its previous record of $24.2 billion in June.
“We’ll keep investing to seize the vast opportunities ahead,” said Microsoft CFO Amy Hood.
Next year, tech giants are set to dramatically increase their spending. Microsoft plans to invest $100 billion in AI, Meta expects to spend between $66 billion and $72 billion, Alphabet has raised its projection to $85 billion (up from $75 billion), and Amazon anticipates $100 billion in capex, with analysts predicting $118 billion for its cloud division, AWS. Combined, these four companies could spend over $400 billion in the coming year—more than the EU’s quarterly defense budget.
Despite these staggering sums, investors want even more. Microsoft, Google, and Meta all announced higher-than-expected capex last quarter, sending their stock prices soaring. Microsoft’s market value hit $4 trillion the day after its report.
Even Apple, traditionally cautious with spending, signaled a major AI push. Its quarterly capex rose to $3.46 billion, up from $2.15 billion last year. While the company reported strong earnings, driven by iPhone sales and growth in China, it’s still seen as lagging behind rivals in AI.
CEO Tim Cook said Apple is shifting a “fair number” of employees to focus on AI, calling it the “heart of our strategy” to enhance privacy and integrate AI across its products.Apple is making significant investments to integrate AI across all its devices and platforms, though CEO Tim Cook didn’t specify exact spending figures.
“We’re substantially increasing our investment, but I won’t share specific numbers,” he said.
Meanwhile, smaller companies are striving to compete with tech giants’ massive spending and seize opportunities in the AI boom. OpenAI recently announced it secured $8.3 billion in funding as part of a planned $40 billion round, valuing the ChatGPT creator at $300 billion.
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