Big Tech Accelerates AI Spending Toward $400 Billion

Major tech companies, including Microsoft, Alphabet, Amazon, and Meta, are massively ramping up their capital expenditures to build artificial intelligence infrastructure, with total spending expected to approach $400 billion in 2025. Microsoft, the second-most valuable company globally, plans to invest over $100 billion, marking a 14% increase from the prior year, which coincides with its strong fiscal Q4 results that exceeded Wall Street expectations and propelled its stock near a record high. CEO Satya Nadella highlighted Azure cloud's growth of 34%, generating over $75 billion annually, as a key driver of the company's success amid intense competition for AI talent, with some engineers receiving multi-million-dollar compensation packages. Alphabet and Amazon are also aggressively expanding, with Alphabet targeting $85 billion and Amazon around $100 billion in capital spending to meet soaring demand for AI and cloud services. These investments are fueling optimism on Wall Street, as evidenced by surging premarket trading and confidence in AI's transformative impact on various industries, including Meta's forecast of strong advertising revenue growth driven by AI. Overall, this AI arms race underscores the strategic priority placed on AI infrastructure and talent acquisition across the tech sector.