Amazon, Microsoft, Alphabet, and Meta said in recent earnings reports they will raise or maintain spending on AI infrastructure, easing fears that the largest cloud computing providers are pulling back on data center demand.

That supports suppliers of chips and networking equipment.

Amazon raised its full-year capital expenditure forecast to US$220 billion from US$200 billion and said most of the spending will go to AI.

Alphabet raised its full-year capital expenditure outlook, Microsoft reaffirmed its outlook excluding an accounting change, while Meta raised the low end of its capital expenditure guidance.

The reassurance follows investor concern over data center projects that were paused and lease cancellations, along with worries that more efficient AI models and possible oversupply could reduce infrastructure needs.

The latest targets continue a broader AI expansion. Amazon’s first-quarter capital expenditure rose to US$24.3 billion from US$13.9 billion a year earlier. Microsoft has said annual capital expenditure will exceed US$85 billion.

Analysts said the next test is whether the spending delivers returns.

Cloud demand remains strong, but only 11% of companies that discussed AI productivity quantified the benefits, and 2% quantified the earnings impact.

🔗 Source: Bloomberg

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