The global AI race is heating up and the flow of investments into data centers, chips and AI infrastructure seems to be stronger than ever. Amazon, Meta, Microsoft and Alphabet are pouring billions into this technology to maintain a competitive advantage in the race.
While investors last year hoped for a cooling of spending, it’s now clear that these expenditures continue to grow, according to eToro analyst for Romania, Bogdan Maioreanu.
Amazon and Microsoft spent nearly $35 billion each on capex last quarter, and warned that the spending would rise this year. Alphabet raised its annual forecast to $91–93 billion, Meta and Amazon even lifted their outlook for 2026. The common rationale is that without massive investments in computing power, energy efficiency and server capacity, maintaining a competitive position in the global AI race is simply not feasible.
Amazon is also ramping its capex. The company expects capital expenditures of about $125 billion for 2025, an increase over analysts estimates. Amazon CFO Brian Olsavsky said that this figure will increase in 2026. Management expects to remain “very aggressive in investing in capacity because they see the demand” for AWS and AI infrastructure. Amazon CEO Andy Jassy emphasized that the company doubled the power capacity of AWS servers compared with 2022, and is on track to double again by 2027. In the last quarter of this year Amazon expects to add at least another 1 gigawatt of power. This capacity consists of power, data centers and chips, primarily Amazon’s custom silicon, Tranium and NVIDIA. AWS is supporting Agentic AI and also other AI related tasks that companies use but also supports Amazon’s own AI assistant, Rufus who had 250 million active customers this year.
For Microsoft, attention this week is centred not only on its earnings report but also on its partnership with OpenAI. The company announced a renewed agreement, increasing its stake in OpenAI’s commercial arm to 27%. At the same time, Microsoft retains exclusive rights to integrate OpenAI’s most advanced models into its cloud services. This strengthens its position as a frontrunner in AI, while giving OpenAI more freedom to raise capital elsewhere. The downside is that spending on data centers and chips continues to pressure Microsoft’s margins and this is a concern for investors. Nevertheless, CFO Amy Hood emphasized that demand for cloud capacity still exceeds supply. This means that Microsoft must continue building new capacities to keep pace with demand.
Alphabet reported over $100 billion in quarterly revenue for the first time, with strong growth across all divisions: Search, YouTube and especially Google Cloud. Investors were relieved that AI implementation didn’t come at the expense of the advertising model, but instead generated new revenue streams. The increased capex—mainly for servers and proprietary AI chips—was seen more as a sign of strength than risk. The takeaway is that Alphabet’s broad approach, from infrastructure to software, gives it a defensible edge over competitors like Microsoft and Amazon. However, rumours are intensifying that OpenAI is developing its own advertising model. OpenAI rolled out a new web browser last week called Atlas. It comes with ChatGPT built in, along with an agent,allowing the user to browse, get direct answers, and also to perform automated tasks. Atlas launched last week on Apple MacOS and will later be available for Microsoft Windows, Apple’s iOS phone operating system and Google’s Android phone system, OpenAI said. As how the advertising will be integrated in the new browser is not clear yet, this new competitor might put Alphabet’s search domination to the test.
Meta Platforms expects that total expenses to be $116–$118 billion (22–24% growth) for 2025, with capex at $70–$72 billion, reflecting higher investment needs. Next year the priorities shift to AI and infrastructure. The company is planning aggressive capex and expense growth, primarily driven by increasing compute and cloud costs to support new AI products. Expense growth in 2026 is driven by infrastructure and AI talent compensation and capex dollar growth set to exceed 2025 levels.
The combined message from Amazon, Microsoft, Alphabet and Meta is clear: the AI race demands deep pockets and patience. For investors, this may mean lower margins in the short term, but also a solid foundation for future profit growth. According to the latest eToro Retail Investor Beat survey, 31% of retail investors at the global level and 38% of Romanian investors are considering long-term investing in digital transformation, a broad theme that includes AI, cloud computing, and VR, among others. When asked why they are considering investing in these long term themes, 25% said that they want to invest in future-related industries, while 19% consider this a way to diversify their portfolios and 18% consider that these long term themes will drive future returns. This is why investors who believe in the potential of AI might see this wave of spending more as an opportunity than a warning while others might start to worry about the size of these.
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