The Big Four Tech Giants to Invest up to $745 Billion This Year, AI Starts the Race to Be the Most Profitable

According to Beating Monitor, based on the latest guidance cap, the combined capital expenditure of Microsoft, Google, Amazon, and Meta this year could reach $745 billion. The funds are mainly allocated to chips, servers, data centers, and networks, as the AI competition shifts from model capabilities to computing power scale and business returns.

The first to see revenue is cloud services. Azure, AWS, and Google Cloud saw revenue growth of 43%, 37%, and 82% respectively. Amazon stated that the annualized revenue from generative AI services and in-house chip business has both exceeded $25 billion.

Microsoft has also packaged AI as enterprise software. Microsoft 365 Copilot has over 30 million paid seats, with a net addition of seats doubling compared to the previous period. Meta's ad revenue grew by 27%, but quarterly capital expenditure reached $31 billion, leaving only $7.84 billion in free cash flow. Its AI investment currently still relies mainly on ad business returns.

The market does not oppose the tech giants continuing to increase their bets on AI, but it is starting to closely scrutinize the cash returns after investment. Microsoft and Amazon saw stock price increases after their financial reports; Alphabet, although experiencing substantial growth in its cloud business, raised concerns with its capital expenditure and cash flow; Meta, on the other hand, is facing profit declines, sharp decreases in cash flow, and rising AI expenses, leading to a greater post-earnings sell-off.