Big Tech is planning to invest $325 billion this year.
Meta (Meta), Microsoft (msft), Amazon (amzn), and the Google parent alphabet (Goog) We hope to spend a cumulative $325 billion capital expenditure and investment in 2025, driven by a continuous commitment to building an artificial intelligence infrastructure.
Taken together, this represents a 46% increase from around $223 billion reported spending in 2024.
The tech giant claims that all this spending will pay off in the long term. Investors have not been so sure recently.
Uncertainty surrounding the payoff timeline – with the continued debate as to whether such high levels of spending are truly justified – Promoted concerns during recent revenue period.
And just as investors are scrutinizing Big Tech’s huge AI spending, there will be investments that surpass companies’ expectations next year.
Suitable Case: Deepseek.
The Chinese startup rattled the market last week, debuting an open source AI model and competed with Openai for a portion of its price. When the model questioned the rationale behind it, the tech stocks were sold all over the board. Tech Giants’ Mammoth Expenses for Artificial Intelligence Infrastructure.
However, Deepseek’s surprise appears to have not affected the big spending plans of high-tech companies.
Amazon is the largest spender of the group’s capital investment, covering Microsoft’s $56 billion and Alphabet’s $53 billion in 2024, $78 billion.
In a post-revenue call Thursday evening, Amazon said its $26.3 billion spending in the last quarter was “reasonably representative” of its 2025 investment plan, with the investment reaching around $105 billion this year. It suggests that.
“The majority of that CAPEX is in AWS’ AI (Amazon Web Services, Amazon’s cloud division),” said Andy Jassy, CEO of Amazon. “AI is certainly the biggest opportunity since the cloud and perhaps represents the biggest technological change and opportunity for business since the internet.”
CEO Mark Zuckerberg said the company will ultimately “expend hundreds of millions of dollars” to invest in AI infrastructure over the long term.” That includes investment in building large data centers such as the construction of New Louisiana facilities Almost Manhattan size.
Company’s Approximately $56 billion in spending meanwhile 2024 (Ends June 31), fueled by AI, coupled with lower than expected revenues associated with artificial intelligence — caused stocks to fall last summer following the results.
Why are investors skittish? This is because revenue generated directly from the company’s AI capabilities remains unknown.
When asked about how Meta is monetizing AI, the company’s response was more or less “week now, worry later.”
“The first focus of Meta AI is to build a truly amazing consumer experience, and frankly, it’s all about our all,” Meta CFO Susan Li said in a call after the revenues on January 29th. It’s where energy is directed like it is now.”
“I think there will be some pretty clear monetization opportunities over time, including paid recommendations and premium offerings, but that’s not where we’re focusing today on developing meta AI,” she said. added.
Do you go crazy? Google headquarters in Mountain View, California, USA. (Photo by Tayfun Coskun/Anadolu via Getty Images) ・Annadoll via Getty Images
Meta stocks have risen The company noted the rapid intake of AI tools for advertisers, which increased from 1 million six months ago to 4 million after revenue reporting despite lack of clarity.
“The return on AI investments is evident in Google’s core advertising business in Meta’s core advertising business,” said Doug Anmuth of JPMorgan.
Google CFO Anat Ashkenazi said in its revenue call that its crowd segment “generates billions of annual revenue from AI infrastructure and generated AI solutions,” but has not provided details . Ashkenazi added that demand for Google’s cloud AI products is outweighing capacity. The company declined to answer Yahoo Finance’s questions about AI revenue.
Regarding the company’s previous $105 billion expense, Amazon’s Jassy said, “Both our company, our customers and shareholders will be happy and pleased in the medium term that we are pursuing AI capital and business opportunities. “But it wasn’t specific about how much revenue AI is contributing or willing to contribute.
Meanwhile, in its latest quarterly profit report, Microsoft has raised $13 billion in annual revenue for the period ended December 31st, with a total of $13 billion in AI operations, including the provision of Azure AI services and other co-pilots and generation AI. He said it exceeded the rate.
Microsoft said AI scored 13% points on Azure revenue growth, up 31% from the previous year. Microsoft AI revenue is driven in part by a commitment from Openai. As AI startups have estimated it, Openai’s own path to monetization is vague We lost $5 billion in 2024, but generated only $3.7 billion in revenue..
Despite investor scrutiny of AI spending, Wall Street analysts remained positive in large tech stocks. In a report on February 3, analysts at Raymond James wrote that “monetization questions remain,” while “there are evidence building to help (companies) fill the gap.”
Analysts at Morgan Stanley said the rise in spending from tech companies is “strengthening the bull case of AI/Cloud Capex stocks.”
Laura Bratton is a reporter for Yahoo Finance. Follow her at Bluesky @laurabratton.bsky.social. Email her to laura.bratton@yahooinc.com.
