As the global AI boom continues, the world's largest tech companies have embarked on an unprecedented spending spree to stay ahead of the curve and build the infrastructure needed for the AI revolution. Last year alone, Meta, Alphabet, Amazon and Microsoft spent more than $400 billion in capital expenditure, most of it dedicated to building the data centers that are the foundation of all AI applications. That's more than double the amount spent in 2023 and yet, there is no end in sight to what experts are calling the "AI arms race". According to the companies' latest CapEx spending forecasts, their joint investments will easily exceed $600 billion this year, with Amazon alone expecting to spend $200 billion on "seminal opportunities like AI, chips, robotics, and low earth orbit satellites."
While hyperscalers Amazon (AWS), Microsoft (Azure) and Alphabet (Google Cloud) are pouring billions into expanding the AI capabilities of their cloud infrastructure - which is a $400+ billion market in itself - Meta is more product-focused, hoping that AI investments will improve its products, boost ad sales and eventually help them develop a "personal superintelligence", as CEO Mark Zuckerberg recently laid out in his new long-term vision.
With each announcement of another increase in capital expenditure, the pressure on competitors rises to do the same, creating a spending spiral as no one wants to risk falling behind in the race towards the AI-centric future. One company that appears to have fallen behind already is Apple. Not only has the iPhone maker failed to impress with its own AI tools so far, but it's also falling behind its peers in terms of AI investments. In fiscal year 2025, which ended in September, Apple's capital expenditure amounted to $12.7 billion, which is a 33-percent increase from the year before but far from the spending levels seen from the rest of the group, formerly known as GAFAM.
