The four major U.S. tech companies (Amazon, Alphabet, Microsoft, and Meta) are projected to spend over $720 billion in capital expenditures this year, most of it on AI infrastructure. Alphabet expects to spend $195 to $205 billion in 2026, more than double the $91.4 billion it spent in 2025, and said it will invest significantly more in 2027. Jefferies warned that the most likely long-term outcome would be massive capital destruction in the U.S., as Chinese open-source models threaten to commoditize large language models and erode the economics behind America’s AI spending. Ruth Porat, from Alphabet, responded that companies adding differentiated value will find customers paying for their services, and that Alphabet’s strategy is to keep investing heavily in AI.
Source: Read the original article
