Big Tech's $635B AI Capex: Surpassing Israel's GDP

The article highlights the extraordinary capital expenditure (capex) plans of Amazon, Google, Meta, and Microsoft, totaling approximately $635 billion in 2026, primarily directed towards AI infrastructure and datacenters. This figure surpasses Israel's 2025 GDP and approaches that of Sweden. The massive investment underscores the intense competition among these tech giants to gain an edge in the AI race. However, the article notes that returns on this spending have not yet met investor expectations, as evidenced by Microsoft's share price decline after recent results. The surge in infrastructure spending is also impacting the wider market, leading to component shortages as manufacturers prioritize chip production for the lucrative datacenter market over those for everyday PCs and phones. Synergy Research Group reports that cloud infrastructure services revenue reached $419 billion in 2025, with GenAI significantly boosting market growth. Amazon (AWS), Microsoft Azure, and Google Cloud continue to dominate the cloud market, while tier-two providers like CoreWeave are experiencing high growth rates due to their focus on AI infrastructure services. The overall trend indicates a significant shift towards AI-driven infrastructure investments, with potential implications for both the tech industry and the broader economy.

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