Big Tech plans $725B AI spend

Amazon, Microsoft, Alphabet and Meta have pushed their combined 2026 capital spending plans to about $725 billion, according to first-quarter earnings disclosures compiled by the Financial Times. The increase has come through a string of April 29 updates as the four companies expanded budgets for servers, data centers, networking gear and other AI infrastructure. (finance.yahoo.com) Reuters reported on May 13 that Cerebras Systems priced its initial public offering at $185 a share, raising $5.55 billion at a fully diluted valuation of $56.43 billion. CNBC reported on May 14 that Cerebras then closed its first trading day at $311.07, up 68% from the IPO price. (money.usnews.com) ### Where is the $725 billion figure coming from? (abc.xyz) The $725 billion total comes from company guidance and spending trends reported after the latest earnings cycle. Yahoo Finance, citing Financial Times calculations from first-quarter earnings, said Amazon, Microsoft, Alphabet and Meta now expect about $725 billion of capital expenditure in 2026, up from a record $410 billion last year. April 29 became the key date because all four companies updated investors within hours of each other. Meta said first-quarter costs were tied to AI infrastructure and data centers, while Amazon said a $59.3 billion year-over-year increase in purchases of property and equipment primarily reflected AI investments. (finance.yahoo.com) Microsoft said it was focused on delivering cloud and AI infrastructure, and Alphabet told investors that the “overwhelming majority” of first-quarter capital expenditure went to technical infrastructure. ### What are the companies saying they need all that money for? Amazon said trailing 12-month free cash flow fell to $1.2 billion as spending on property and equipment rose, and it tied that increase primarily to artificial intelligence. (finance.yahoo.com) AWS sales rose 28% to $37.6 billion in the first quarter, while Chief Executive Andy Jassy said Amazon’s chips business topped a $20 billion revenue run rate. Microsoft said on April 29 that its AI business had surpassed a $37 billion annual revenue run rate, up 123% year over year. Chief Executive Satya Nadella said the company was focused on cloud and AI infrastructure and solutions, linking the spending push to demand from enterprise customers. (investor.atmeta.com) Alphabet said Google Cloud revenue rose 63% and exceeded $20 billion for the first time, while backlog nearly doubled quarter over quarter to more than $460 billion. Chief Executive Sundar Pichai said Alphabet’s AI investments and “full stack approach” were driving performance across the business. Meta said first-quarter revenue rose 33% to $56.3 billion and Chief Executive Mark Zuckerberg said the company was on track to deliver “personal superintelligence to billions of people.” Its earnings release tied spending to infrastructure behind that push. (ir.aboutamazon.com) (microsoft.com) ### Why did Cerebras become part of the same story? Cerebras gave investors a direct way to buy into AI hardware demand. Reuters reported that the Sunnyvale, California, company sold 30 million shares at $185 each on May 13, above the top end of its marketed range, after orders exceeded available shares by more than 20 times. (abc.xyz) May 14 showed how strong that appetite was in public trading. CNBC reported that Cerebras opened at $350, peaked at $386 and closed at $311.07, giving the company a market value of about $95 billion by the end of its debut session. CNBC also said the company had expanded its business this year through deals with Amazon and OpenAI. (investor.atmeta.com) ### What does this do to the hardware supply chain? The companies’ disclosures point to the same inputs: chips, servers, networking equipment, data-center capacity and power. Alphabet said most of its first-quarter capital expenditure went to technical infrastructure, and Amazon said its property-and-equipment increase primarily reflected AI investments. Those statements do not quantify shortages, but they show the largest cloud buyers are still committing more capital to the same build-out at the same time. (money.usnews.com) Reuters said Cerebras’ IPO came as investors piled into companies linked to artificial intelligence and defense spending, helping more than double U.S. IPO proceeds this year to $22.3 billion, according to Dealogic. (cnbc.com) That financing backdrop gives hardware suppliers another route to raise capital as demand from hyperscalers expands. ### What are the next dates to watch? May 19 is the next scheduled marker in the cycle because Alphabet told investors that the month of May would include its I/O developer event after Cloud Next. The event is one of the company’s main stages for product and infrastructure updates tied to Gemini and Google Cloud. (ir.aboutamazon.com) The next step for Cerebras is also defined. CNBC reported that underwriters have a 30-day option to buy an additional 4.5 million shares, which would lift total IPO proceeds to about $6.38 billion if exercised. (cnbc.com) (abc.xyz) (money.usnews.com)