Driven by a continued growth in demand and the rise of new rivals like China’s DeepSeek, tech giants are preparing for unprecedented investments in AI and data infrastructure, with a combined $320 billion expected to be spent on manufacturing in 2025, a significant increase from the $230 billion that Meta, Amazon, Alphabet and Microsoft spent in 2024, indicating a continued commitment to the burgeoning AI sector.

These ambitious spending plans were announced in recent earnings reports, following a stock market sell-off. Investors have been concerned about the need and effectiveness of such massive spending, especially in the wake of the DeepSeek. Executives, however, have remained steadfast, emphasizing the long-term potential of AI to drive growth and maintain technological leadership.

Tech giants are increasing their investment in artificial intelligence - photo: Pixabay

Amazon is leading the race, as it has planned to spend more than $100 billion, up from $83 billion in 2024. CEO Andy Jassy highlighted the “unique business opportunity” AI presents for its cloud computing service Amazon Web Services (AWS).

Microsoft also plans to spend $80 billion in the fiscal year of 2025. President Brad Smith noted that more than half of this investment will be spent on AI workloads data centers in the US.

Alphabet, Google’s parent company, has also set a target of investing $75 billion in AI. CFO Anat Ashkenazi said the majority of this capital will go to technical infrastructure, primarily servers, followed by data centers and networks. Meta, led by CEO Mark Zuckerberg, is spending $60 billion to $65 billion on AI by 2025.

Apple’s AI investments are harder to track, appearing mostly as operating expenses due to its reliance on cloud providers like Google, AWS, and Azure.

However, CEO Tim Cook emphasized a mixed approach, leveraging both internal development and external partnerships.

In addition, electric carmaker Tesla said AI-related capital expenditures were approximately $5 billion in 2024, out of $11.34 billion in total. The company expects its AI spending to be flat year over year. The company has been building a “training cluster,” called Cortex, at its Texas facility to develop models for self-driving technology and robotics.