Fortune (February 6)
“The amount companies are spending on AI infrastructure now rivals that of some of the largest economies in the world and is comparable to the annual GDP of countries like Sweden and Israel.” Alphabet, Amazon, Meta and Microsoft combined are expected to allocate “more than a staggering $630 billion” to CAPEX in 2026 for “such big-ticket infrastructure items as data centers, servers, and power systems that fuel the AI build-out race.”
Tags: $630 billion, 2026, AI, Alphabet, Amazon, CAPEX, Data centers, GDP, Infrastructure, Israel, Meta, Microsoft, Servers, Staggering, Sweden
New York Times (November 18)
UBS expects “the global A.I. capex tally” will “hit $423 billion this year…and reach $1.3 trillion by 2030.” But Big Tech’s “debt-fueled spending spree” is raising concern. “Not long ago, huge investment pledges pushed the A.I. rally to new heights. But the need to borrow so many billions is beginning to rattle stock and bond investors.” For example, “shares in Oracle, and some of if its bonds, have sold off sharply in the past month in a sign of investors’ growing concerns about its long-term A.I. financing plan.”
Tags: $1.3 trillion, $423 billion, 2030, A.I., Big tech, Bond, Borrow, CAPEX, Debt-fueled, Financing, Investors, Oracle, Shares, Spending spree, Stock, UBS
The Economist (July 31)
“America’s biggest technology companies are combining Silicon Valley returns with Ruhr Valley balance-sheets. Investors who bought shares in Alphabet, Meta and Microsoft a decade ago are sitting on eight times their money, excluding dividends.” Their hard assets multiplied with data center investment and their property, plant and equipment is now “worth more than 60% of their equity book value, up from 20%” a decade ago. Even more eye popping, combined with Amazon and Oracle, their capex spending is estimated to account “for a third of America’s economic growth during the most recent quarter.”
Tags: Alphabet, Amazon, Balance sheets, Book value, CAPEX, Data centers, Dividends, Eye-popping, Hard assets, Investors, Meta, Microsoft, Oracle, Returns, Shares, Silicon Valley, U.S.
Wall Street Journal (April 8)
As a group, S&P companies have gained efficiency while rebounding to pre-recession levels. “S&P 500 companies have become more efficient—and more productive. In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000.” These same companies have also increased capital expenditures, reduced debt and increased cash on hand.
As a group, S&P companies have gained efficiency while rebounding to pre-recession levels. “S&P 500 companies have become more efficient—and more productive. In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000.” These same companies have also increased capital expenditures, reduced debt and increased cash on hand.
Tags: CAPEX, Cash, Debt, Efficiency, Productivity, Recession, S&P
