According to estimates by the Financial Times, American big tech companies plan to spend a combined $660 billion on AI-related projects by 2026, News.Az reports.
Against this backdrop, Amazon, Google and Microsoft collectively risk losing around $900 billion in market capitalization since publishing their quarterly earnings reports last week, the newspaper calculated.
Investors were unsettled by the sheer scale of the spending plans, which overshadowed otherwise strong revenue growth in the companies’ cloud computing divisions, the Financial Times noted.
Combined investment by Amazon, Google, Microsoft and Meta in AI data centers and specialized chips used to train and operate advanced AI models is expected to rise by 60 percent in 2026 compared with 2025 levels. Big tech companies committed about $410 billion to these purposes in 2025, up from $245 billion in 2024—an increase of 165 percent over two years, according to the Financial Times.
“Capital expenditures look staggering,” said Jim Tierney, head of the US concentrated growth fund at AllianceBernstein.
Even a 14 percent increase in combined annual revenue—bringing big tech’s total to $1.6 trillion—failed to ease investor concerns. Apple, which has largely stayed out of the aggressive AI capital expenditure race, was the only major Silicon Valley firm to avoid the sell-off. Following its earnings report, Apple shares rose 7.5 percent amid reports of record sales, the Financial Times said.
By contrast, Amazon shares fell 11 percent after markets closed on Thursday, February 5. On the same day, the company announced that its capital expenditures this year would reach $200 billion—$50 billion above market expectations and higher than already ambitious plans announced by Google and Microsoft. Amazon chief executive Andy Jassy said the spending was necessary to position the company for growth in AI, semiconductors, robotics and satellite technology. He pointed to Amazon Web Services’ 24 percent year-on-year revenue growth as evidence that the investments are beginning to generate returns.
Microsoft experienced the steepest decline among its peers, with shares down 18 percent since its earnings release last week. While the company reported 26 percent year-on-year growth in cloud revenue to $51.5 billion, the figure fell short of market expectations. Investors also reacted negatively to a 66 percent surge in quarterly data center spending compared with the previous year. In addition, Microsoft disclosed for the first time the extent of its reliance on OpenAI, revealing that 45 percent of its $625 billion backlog of future cloud contracts is tied to the AI firm—prompting analyst concerns about overdependence on a single client.
Strong financial results at Alphabet also failed to calm markets. The company’s annual revenue surpassed $400 billion for the first time, and profits are projected to reach $132 billion in 2025. However, plans to double capital expenditures to $185 billion weighed on sentiment, with Alphabet shares closing down 0.6 percent on February 5.
Meta also announced in late January that it plans to double capital expenditures to $135 billion. Although the company’s shares initially jumped 10 percent after demonstrating how AI is improving advertising efficiency, those gains were later wiped out amid a broader market sell-off that pushed the Nasdaq index down 4 percent over five days.
According to Dec Mullarkey of SLC Management, the surge in spending underscores that fulfilling AI-related ambitions will require more time and resources than many investors anticipated. He said elevated capital expenditures suggest that big tech’s AI strategies may take longer to deliver meaningful returns, at a time when markets are already focused on when AI revenues will materialize.
Market sentiment was further dented by confirmation that OpenAI’s proposed $100 billion investment and infrastructure deal with Nvidia had collapsed. Shares in Oracle—which relies heavily on OpenAI to drive growth in its cloud business—fell 18 percent over five days, despite the company raising $25 billion in debt and expressing “high confidence” in OpenAI’s ability to secure funding and meet its obligations.
Against this turbulent backdrop, Apple emerged as the standout performer of the earnings season, according to the Financial Times. The company reported record quarterly revenue of $144 billion, driven by strong demand for the iPhone 17 in the United States and China. Capital expenditures in the final quarter fell 17 percent to $2.4 billion, bringing full-year spending to around $12 billion. In January, Apple also signed an agreement with Google to use its Gemini AI model to enhance Apple’s AI capabilities, including upgrades to the Siri voice assistant.
