Tech giants’ capex budgets exploding amid AI arms race

Investments in technology that will supposedly change existence itself apparently ain’t cheap.

Meta recently reported plans for up to $135 billion in capex this year, far exceeding the $72.2 billion it spent in 2025. Not to be outdone, Google parent company Alphabet said its capex budget could reach $185 billion, more than double the $91.4 billion it allocated last year. But then Amazon, coming in from the top rope, said it expected its capital expenditures to reach $200 billion, compared with $128.3 billion in 2025. Make no mistake, these mega capex budgets are a consequence of the AI arms race.

Alphabet CEO Sundar Pichai said during the company’s earnings call last Wednesday that “we are seeing our AI investments and infrastructure drive revenue and growth across the board,” adding that its great capex expectations come from the need “to meet customer demand and capitalize on the growing opportunities ahead of us.”

On Amazon’s earnings call Thursday, CEO Andy Jassy said the company will spend its capex budget “predominantly in AWS because we have very high demand,” adding that “customers really want AWS for core and AI workloads, and we’re monetizing capacity as fast as we can install it.”

It’s not just the tech giants. Research shows that organizations in other industries are also upping their tech and AI budgets.

Forrester recently forecast that global tech spend by enterprises and governments would increase 7.8% to $5.6 trillion this year, with North American tech spend growing 9% to $2.28 trillion.

“In spite of economic volatility worldwide, tech spending will see robust growth, fueled by the defense, financial services, healthcare, industry, and retail sectors’ continued investment in and adoption of AI,” Michael O’Grady, principal forecast analyst at Forrester, said in a statement.

Gartner research found that more than half (57%) of 142 CFOs surveyed in August and September indicated they planned to beef up their capex budgets, and nearly nine in 10 (89%) expected to increase AI spending. CFOs most commonly said AI budgets would go up between 6% and 10% over current levels.