Commentary: Major tech firms have committed over $300 billion to AI investments throughout 2025
Winners and Worries: Meta Shines, Google Stumbles
Meta’s ad-driven AI success contrasts with Google’s risky “AI overview” strategy.
Charisma
Gates AI
If you thought Big Tech was going to slow down on AI, think again. Amazon just announced it’s dropping over $100 billion in 2025, mostly to expand AWS data centers and servers. And they’re not alone. Microsoft, Alphabet (Google), Amazon, and Meta already spent a jaw-dropping $246 billion in 2024 — a 63% jump from 2023. This year, spending could blow past $320 billion as they all race to dominate AI models and infrastructure.
But all this money isn’t coming without risk. Markets took a hit after Chinese startup DeepSeek launched a cheaper, efficient AI model that rivals Google and OpenAI. That single move wiped $600 billion off Nvidia’s market value in one day. Microsoft and Google also stumbled, each losing about $200 billion in value as their cloud growth slowed and costs soared. Investors are nervous: what if all this spending doesn’t bring fast returns, but instead cuts into dividends and buybacks?
Amazon, Google, and Microsoft are still pushing hard with plans to spend $100bn, $75bn, and $80bn, but the market isn’t treating them all the same. Meta is the exception here — investors love that its AI tools are boosting ad targeting and immediately making more money. Meanwhile, Google’s “AI overviews” in search are trickier. They show off Google’s AI skills, but they also risk cutting into its main money-maker: ads. Even so, Google still pulled in $54bn in ad revenue, up 13% at the end of 2024.
Zoom out, and the picture gets clearer. The so-called “Magnificent Seven” — Amazon, Microsoft, Alphabet, Meta, Apple, Nvidia, and Tesla — are leaving everyone else behind. Their capital spending shot up 40% in 2024, compared to just 3.5% among the rest of the S&P 500. Their profits? Up one-third, while other companies only grew 5%. AI is clearly creating a giant gap between Big Tech and the rest of the corporate world.
And it’s not just the giants spending. OpenAI’s Sam Altman is working on a $100bn partnership with SoftBank and Oracle, with the potential to scale to $500bn. SoftBank might even drop another $25bn into OpenAI itself, valuing it at $260bn. Yes, some worry about an “AI bubble” or even an “AI winter,” but the big players aren’t slowing down. In their view, winning in AI is too important to risk falling behind.
Credit
Big Tech lines up over $300bn in AI spending for 2025
By Stephen Morris and Rafe Uddin
Reference link:
https://www.ft.com/content/634b7ec5-10c3-44d3-ae49-2a5b9ad566fa?utm_source=chatgpt.com
