Big Tech AI spending expected to hit $725 billion
Big Tech is betting huge on AI, with total AI-related spending expected to hit $725 billion, actually topping the gross domestic product of several smaller nations.
Microsoft alone bumped its spending from $150 billion to $190 billion from roughly three quarters ago to now, mostly because memory and hardware are getting pricier and strong underlying demand is also a key driver.
Google Cloud's $20B lifts Alphabet
Google's parent company, Alphabet, just saw its stock jump nearly 7% after Google Cloud's revenue crossed $20 billion for the first time.
CEO Sundar Pichai admits cloud growth is limited by computing power right now but expects spending to keep rising.
Meanwhile, all this AI investment is squeezing cash flow for companies like Alphabet, Meta, and Microsoft, but they are staying optimistic about big payoffs down the line.