Overview
- Microsoft, Alphabet, Meta, and Amazon reported roughly $370 billion in 2025 capital spending with executives signaling higher outlays in 2026.
- AI-linked names have driven about 75% of S&P 500 returns and 80% of earnings growth since late 2022, and Jason Furman estimates data-center and processing investment explained nearly all U.S. GDP growth in the first half of 2025.
- Scrutiny is intensifying over how the buildout is funded, including special-purpose vehicles such as Meta’s $27 billion Louisiana project and a further $30 billion raised through bond sales.
- Energy experts warn some facilities may be built before power is available, utilities sought nearly $30 billion in rate increases in the first half of 2025, OpenAI cautioned the White House about generation limits, and the U.S. added 49 GW of renewables in 2024 versus China’s 429 GW.
- Tech giants continue to cut jobs despite strong profits—Amazon plans to eliminate 14,000 corporate roles and Microsoft cut about 15,000—while companies assume six-year GPU lifespans even as Nvidia’s architectures refresh roughly every two years, a mismatch that could squeeze future profits.