Tech companies had a record-breaking $44B spending spree thanks to AI
And they plan on spending even more
Big tech is spending big on AI. Last quarter the combined capital expenditure for Amazon, Alphabet, Microsoft, and Meta was a record more than $44 billion, according to standardized data from FactSet.
And listening to the companies’ forward-looking statements on their latest earnings calls, that spending is heading even higher:
Amazon CEO Andy Jassy: “We expect the combination of AWS's reaccelerating growth and high demand for gen AI to meaningfully increase year over year capital expenditures in 2024, which given the way the AWS business model works, is a positive sign of the future growth. The more demand AWS has, the more we have to procure new data centers power and hardware.”
Alphabet CEO Sundar Pichai: “We are committed to making the investments required to keep us at the leading edge in technical infrastructure. You can see that from the increases in our capital expenditures. This will fuel growth in Cloud, help us push the frontiers of AI models, and enable innovation across our services, especially in Search.”
“Microsoft CFO Amy Hood: “We expect capital expenditures to increase materially on a sequential basis driven by cloud and AI infrastructure investments.”
Meta CEO Mark Zuckerberg: “As we're scaling capex and energy expenses for AI, we'll continue focusing on operating the rest of our company efficiently. But realistically, even with shifting many of our existing resources to focus on AI, we'll still grow our investment envelope meaningfully before we make much revenue from some of these new products.”
Generally, the market seems to approve, but that’s also because these companies are raking in gobs of money, even if they’re spending more than usual. The one exception seems to be for Meta, where it’s not quite clear how much of the growing spending will go toward AI (investors like!) or the Metaverse (investors hate!), and how long it will take for these bets to drive revenue.
