Big Tech commits at least $610 billion to AI, then loses $950 billion in market value

Alphabet, Amazon, Meta, and Microsoft are gearing up to spend a combined $610 billion on data centers and AI infrastructure in 2026.

That is about 70 percent more than in 2025, Bloomberg reports. Amazon leads the pack at $200 billion, followed by Alphabet at $180 billion, Meta at $125 billion, and Microsoft at $105 billion. For each company, the 2026 budget alone nearly equals what it spent over the previous three years combined.

And there's still a bottleneck, if you believe Google CEO Sundar Pichai. On Alphabet's Q4 2025 earnings call, he told analysts that the company has been "supply constrained even as we've been ramping up our capacity." Supply-chain lead times are growing longer, he said, which means there is an inherent delay between committing capital and actually bringing new AI compute online.

But even with strong quarterly numbers, the four companies shed a combined $950 billion in market value after reporting earnings. Investors still can't figure out whether—or when—these enormous bets on AI will actually start paying off.

2026 estimates based on midpoint of company guidance (Alphabet, Meta, Amazon) and Bloomberg consensus (Microsoft). Source: Bloomberg.

The AI spending trap keeps getting bigger

That uncertainty points to a deeper problem. A huge chunk of these companies' market value is built on the promise of future AI profits, and cutting spending would signal they're losing confidence in that promise. That makes pulling back almost impossible without tanking their stock prices.

The result is a self-reinforcing spending cycle. Big Tech invests billions in startups like OpenAI, and those startups turn around and spend that money on cloud services from the very companies that funded them, boosting the cloud revenue that helps justify the next round of infrastructure spending.

Real demand from enterprises and developers is driving cloud growth too. But when a significant chunk of your fastest-growing customers are funded by your own investment arm, it gets hard to tell where organic demand ends and the money starts cycling back.

At this point, the whole thing looks like an arms race where the cost of staying in the game keeps rising, but the endgame remains unclear.