Key Points:
- Tech giants will spend over $650 billion on AI this year.
- Most funds will buy data centers, servers, and computer chips.
- Stocks for Amazon, Google, and Microsoft fell due to cost concerns.
- Chipmakers like Nvidia and AMD saw stock gains from the news.
The world’s four biggest technology companies are betting the farm on artificial intelligence. Microsoft, Alphabet, Amazon, and Meta plan to spend more than $650 billion combined on AI investments this year alone. This massive number marks a sharp increase from last year, jumping by roughly 70% compared to 2025.
Amazon leads the pack with a staggering $200 billion budget for 2026. Alphabet, the parent company of Google, told investors on Wednesday that it expects to spend between $175 billion and $185 billion. Meanwhile, Microsoft is on track for about $145 billion in annual spending, and Meta plans to invest up to $135 billion.
Most of this cash is going toward physical hardware. The companies need to build more data centers and fill them with expensive AI chips and servers to power the next generation of technology.
However, Wall Street isn’t entirely thrilled about the price tag. Investors sold off shares immediately following the announcements, worried that the costs are too high. Amazon’s stock dropped more than 8% on Friday, while Microsoft tumbled over 11%. Alphabet also saw a 3% dip. Meta was the only outlier, with its stock rising after proving that AI is already boosting its advertising revenue.
Analysts view this skepticism as a healthy sign. Gil Luria from DA Davidson noted that investors are being careful and demanding proof that these investments will actually make money. Rather than buying into hype, the market now wants to see real returns before driving stock prices higher.
While the tech giants spend the money, the companies selling the hardware are winning big. Chipmakers like Nvidia, Broadcom, and AMD saw their stock prices climb on Friday. As long as Amazon and Google keep buying chips to build their infrastructure, these suppliers stand to gain the most.
