The AI race has great technology spending of $ 344 billion this year | Mint

(Bloomberg) – If there is a lesson to take from the spending plans that the world’s largest technology companies have been issued over the past two weeks, it is never to underestimate the fear of fog. Microsoft Corp., which set up a $ 24.2 billion capital expenditure over the past quarter, plans to take up in the current $ 30 billion period. Amazon.com Inc. spent the past quarter $ 31.4 billion in the same way, almost double it dropped a year ago, and maintain the investment level. Google -owner Alphabet Inc. increased its lead for capital expenditure to $ 85 billion this year. Then there are Meta Platforms Inc.: The social network giant has lifted the low point of its forecast for 2025 capital expenditure and predicts that the cost will grow even faster next year. In total, the four companies are expected to spend more than $ 344 billion for the year, and many of them go to the data centers needed to manage AI models. “We basically tripled the Capeex investment in Cloud because of AI,” said Mandeep Singh, Bloomberg analyst. The emphasis of almost every company manager during this earnings season was to invest as quickly as possible to get ahead. “We need the teams to do their best to get the capacity in place as quickly and effectively as possible,” Microsoft CFO Amy Hood told analysts on Wednesday. Susan Li, CFO of Meta, said the purpose of his own spending is to ensure the benefit “to develop the best AI models.” Wall Street’s reaction is mixed. Meta is rewarded-large because the company achieved strong sales of the second quarter and issued a rosy income forecast, which indicated that the billions of rands he spent on AI. “In advertising, the strong performance this quarter is largely thanks to AI that unlocks greater efficiency and profits in our advertising system,” said Mark Zuckerberg, CEO. Zuckerberg plans to build several massive data centers and valued top AI researchers with compensation packages on hundreds of millions of dollars. The company recently restructured its internal AI division, which is now referred to as Meta Superintligence Labs, in an effort to build AI capabilities at human level and apply the technology to its products. Shares of the company have risen more than 8% since earnings Wednesday. Amazon, on the other hand, failed to convince investors that the lavish spending was worth it. The share dropped to 8.1% on Friday after the company reported a good sales of its cloud division. According to Bloomberg Intelligence, the results were “especially disappointing” given the strong performance of Google and Microsoft’s own cloud services. And the continued capital costs will not help. The operating margin for Amazon’s cloud unit will continue to experience the pressure “through 2026 as capital spending arises,” Bi -analysts Poonam Goyal and Anurag Rana said. Alphabet’s shares are essentially unchanged from last week when it issued earnings and guidance. The company raised its prospects for capital expenditure by $ 10 billion and expected to increase spending even more in 2026. CEO Sundar Pichai explained that the investments are needed to keep up with customer demand. “Obviously, we see a strong momentum about our portfolio and especially in the cloud,” Pichai told analysts on July 23. “It’s a narrow offer environment, and we invest more to expand.” Nikhil Lai, an analyst at Forrester, put it differently: If Google wants to keep up with competitors, he said, it has little choice but to follow it: “Google’s hand is forced to spend tremendously on AI’s infrastructure and applications.” Microsoft has directly linked its AI investments to a 39% sales for its Azure Cloud computing division, which came before the estimates of analysts. “We are leading to lead the AI infrastructure wave and took share every quarter this year,” CEO Satya Nadella said on July 30. “In Microsoft’s case, the returns are good,” Gil Luria, an analyst at Da Davidson & Co., said in an interview. The only question now is whether Microsoft’s clients in turn see a decent return on investment, he said. “That’s where the test will be,” he said. “If they don’t, they’re not going to increase it next year.” Apple Inc. capital plans are pale compared to its large technical counterparts. But the iPhone manufacturer has raised its spending estimates and links much of the increase to AI efforts. Apple’s real estate, plant and equipment investments amounted to $ 9.47 billion in the nine months ended June 28, almost 45% higher than a year ago. “You’re going to continue to see our Capeex grow,” CFO Kevan Parekh told analysts on Thursday. ‘It’s not going to be exponential growth, but it’s going to grow significantly. And a lot of it is a function of the investments we do in AI. ‘ -With help from Nick Turner. (Add card to the fourth paragraph and detail about Apple’s spending in the second to last paragraph) More stories like these are available on Bloomberg.com © 2025 Bloomberg LP