Whether it is a bubble or a boom, artificial intelligence spending is far from finished. The technology titans are still collectively pumping hundreds of billions of dollars into AI this year with plans to increase those investments as they struggle to keep up with capacity demands.
That was a common theme last week in earnings calls held by the three major hyperscalers and Facebook parent Meta.
Microsoft executives said the company’s capital expenses hit $35 billion last quarter, up $5 billion from its own forecast. Amazon said it would spend $125 billion this year and more in 2026 as it expects to double AWS capacity by 2027 to accommodate AI. Google forecast capital expenditures for the full year of at least $91 billion, and Facebook said it will spend $70 billion to $72 billion in 2025 – almost twice its 2024 capex.
"We are seeing increasing demand and diffusion of our AI platform and family of Copilots, which is fueling our investments across both capital and talent,” Microsoft CEO Satya Nadella said. "We will increase our total AI capacity by over 80% this year and roughly double our total data center footprint over the next two years, reflecting the demand signals we see."
He added: “When it comes to infrastructure, we're building a planet-scale cloud and an AI factory.”
Meta CEO Mark Zuckerberg said his goal is to establish his company as the leading frontier AI lab.
“Our approach of advancing open-source AI means that when Meta innovates, everyone benefits,” he said. “Meta Superintelligence Labs is off to a strong start. I think that we've already built the lab with the highest talent density in the industry. We're heads down developing our next generation of models and products and I'm looking forward to sharing more on that front over the coming months.”
Meta Superintelligence refers to a future AI system that would surpass human intelligence in all areas. Zuckerberg said that may be achieved anywhere from a few years to seven years.
“I think that it's the right strategy to aggressively frontload building capacity so that way we're prepared for the most optimistic cases,” he said. “That way, if superintelligence arrives sooner, we will be ideally positioned for a generational paradigm shift in many large opportunities.”
Meta CFO Susan Li added the Facebook parent intends to add more capacity than it planned to add just last quarter. Meta will build its own infrastructure and contract with cloud providers for additional capacity, she said.
“While our progress on AI models and products will position us to capitalize on new revenue opportunities in the years to come, a central requirement to realizing these opportunities is infrastructure capacity,” Li said. “We're certainly seeing that we wish we had more capacity today than we do.”
Google CEO Sundar Pichai credited AI with playing a big role in the company’s first $100 billion revenue quarter. “We are seeing AI now driving real business results across the company,” he said. “The Gemini app now has over 650 million monthly active users, and queries increased by three times from Q2.”
He said Alphabet will scale up advanced AI infrastructure by adding Nvidia GPUs as well as its own Tensor Processing Units (TPUs.)
Amazon CEO Andy Jassy said Amazon's Project Rainier AI compute cluster is up to nearly 500,000 Trainium2 chips and is expected to surpass 1 million by the end of 2025.
“You're going to see us continue to be very aggressive in investing in capacity because we see the demand,” Jassy said. “As fast as we're adding capacity right now, we're monetizing it. It's still quite early and represents an unusual opportunity for customers in AWS.”
It’s clear that Amazon and its rivals see that same unusual opportunity and will continue to invest to make the most of it, even if it means reducing staff.