Chart of the Week: 2025’s Monster AI Spend is Now Revealed

With the final hyperscalers reporting their quarterly results, the market now has a comprehensive view of the year ahead from the major players in AI, excluding Nvidia (NVDA). Investors had been curious if the prospect of “affordable” AI from DeepSeek would challenge the narrative that hyperscalers—Alphabet, Microsoft, Meta, and Amazon—were uniquely positioned for significant gains by making record-breaking investments in the new technology.

Meta (META) nearly doubled its spending, and Microsoft (MSFT) increased its $56 billion investment from the previous year to $80 billion. Alphabet (GOOG, GOOGL) then announced $75 billion. Amazon (AMZN) followed suit, hitting $105 billion. The combined AI spending of the Big Four totals $325 billion, a 46% increase over last year. These companies remain fully committed to AI.

Amazon CEO Andy Jassy emphasized that the majority of the capital expenditure is for AI in AWS, stating, “We don’t procure it unless we see significant signals of demand.” The executives assert that they are seeing demand, not just building a “field of dreams” in hopes that it will come.

The significant question remains: how much of this investment is actually profitable? However, as Jassy noted, these are investments for a “once-in-a-lifetime” opportunity, promising shareholder satisfaction in the medium to long term. For now, Wall Street is content with this outlook.