Microsoft · Amazon · Google · Meta · Mark Zuckerberg · Agentic AI · Tom's Hardware
Skyrocketing component prices push Big Tech capex to record $725 billion
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Google, Amazon, Microsoft, and Meta plan to spend a combined $725 billion on capital expenditure in 2026, a 77% increase over last year's record $410 billion, according to first-quarter earnings reports compiled by the Financial Times.
Key facts
- Per Intel CFO David Zinsner, data center CPU-to-GPU ratios have already moved from 1:8 to 1:4, with further convergence expected to reach or go beyond parity
- Google, Amazon, Microsoft, and Meta plan to spend a combined $725 billion on capital expenditure in 2026, a 77% increase over last year's record $410 billion, according to first-quarter earnings
- Microsoft set its 2026 spending at $190 billion, far above the $152 billion average analyst forecast
- Meta and Microsoft aside, Google’s Cloud revenue hit $20 billion in the same quarter, growing 63% year over year, outpacing both Amazon Web Services ($37.6 billion, up $8.3 billion) and Microsoft's
Summary
Google led with 63% cloud revenue growth and an 81% jump in net income to $62.6 billion, while Meta's stock dropped 6% after hours despite a 33% revenue increase, punished by investors for adding $10 billion to its spending forecast and offering no firm timeline on new AI models. But in the earnings calls, at least two of the four companies explicitly blamed rising memory chip prices for pushing budgets higher, confirming what market data and industry executives have been warning about for months. Microsoft’s CFO, Amy Hood, told investors that rising prices for memory chips and other components accounted for $25 billion of the company's record capex budget.