Important Takeaways:

• Megacap technology companies funneled billions of dollars into artificial intelligence last year to try and keep up with unfettered demand. The hype isn’t dying down in 2025.
• Meta, Amazon, Alphabet and Microsoft intend to spend as much as $320 billion combined on AI technologies and datacenter buildouts in 2025, based on comments from their CEOs early this year and throughout earnings calls in the past two weeks.
• That’s up from $230 billion in total capital expenditures in 2024.
• The recent rise of China’s DeepSeek sent a shockwave through the sector, with estimates suggesting the open-source tool cost a fraction of some U.S.-based competitors to create.
• Those fears spurred a market selloff last week, pushing shares of AI chipmakers Nvidia and Broadcom down by a combined $800 billion in a single day. That development forced U.S. tech CEOs to field questions over their hefty spending plans and whether it’s all necessary.
• The answer, so far, is that they’re not slowing down.
• Amazon offered the most ambitious spending initiative among the four, aiming to shell out over $100 billion, up from $83 billion in 2024…
• Last month, Microsoft said it would allocate $80 billion in the 2025 fiscal year to create AI workloads data centers.
• Alphabet is targeting $75 billion in capital expenditures this year, with $16 billion to $18 billion expected in the first quarter…the majority of spending would go toward “technical infrastructure, primarily for servers, followed by data centers and networking.”
• Meanwhile, Meta CEO Mark Zuckerberg set his company’s AI capex budget at $60 billion to $65 billion in January, calling 2025 a “defining year for AI.”… he said the move would help “unlock historic innovation and extend American technology leadership.”

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