Capital expenditures at Amazon, Alphabet, Microsoft and Meta grew to more than $44B last quarter.

Tech companies had a record-breaking $44B spending spree thanks to AI

And they plan on spending even more

5/1/24 3:22PM

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.

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Prediction markets have, predictably, been given a boost by the summer of sports

Major platforms like Kalshi and Polymarket have seen huge upticks in users of late, thanks in no small part to what’s felt like a recent sporting smorgasbord, with major competitions across hockey, basketball, and soccer soaking up fans’ time (and spending, clearly) at the outset of summer.

While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5