Microsoft's CFO attributed $25 billion of its record capex budget to rising memory chip prices.
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"The AI economy is healthy," Brent Thill, an analyst at Jefferies, told the Financial Times, adding that recent revenue growth justified the enormous capital outlays. "The bear thesis is garbage."
Microsoft set its calendar-year 2026 capex at $190 billion, well above the $152 billion average analyst estimate. The company’s CFO, Amy Hood, attributed $25 billion of that figure to rising memory chip and component costs. She told investors that despite the additional spending, Microsoft expects to remain capacity-constrained through at least 2026 as it works to bring GPU, CPU, and storage infrastructure online faster.
You may like Alphabet is doubling its capital expenditure to a staggering $180 billion in 2026 Memory will consume 30% of hyperscaler data center spending this year, a 4X increase over 2023 OpenAI aims to secure $100 Billion in latest funding round, reportedly aiming for an $800 billion valuation Meta increased its full-year projection by $10 billion to a range topping $145 billion. The company cited higher component pricing, particularly for memory, alongside growing competition for land, power, and skilled workers needed to build data centers. Revenue grew 33% to $56.3 billion.
Dec Mullarkey, managing director of SLC Management, told the Financial Times that investors are growing uneasy with Meta's escalating infrastructure costs, questioning whether a historically lean business is becoming far more capital-hungry. “Investors continue to be concerned about how Zuckerberg’s once capital-light money machine may be morphing into a capital-intensive incinerator,” he said.
Alphabet posted an 81% increase in net income to $62.6 billion on revenue of $110 billion. Google Cloud reached $20 billion in quarterly revenue, growing faster than Amazon Web Services ($37.6 billion total, adding $8.3 billion year over year) and Microsoft's Azure-driven cloud segment ($34.7 billion total, adding $7.9 billion).
The company's cloud contract backlog reached $460 billion, roughly double the $240 billion reported at the end of Q4 2025 . Google Cloud boss Thomas Kurian credited the company's strategy of building custom AI chips, foundation models, and products in-house for giving it a cost and research advantage over competitors. Alphabet's capex guidance rose by $5 billion to as much as $190 billion, matching Microsoft. Shares climbed 7% after hours, putting Alphabet on track for a record $4.3 trillion market valuation.
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- https://www.tomshardware.com/tech-industry/big-tech/big-techs-ai-spending-plans-reach-725-billion#main
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