Microsoft is accelerating the AI race.
The tech giant surprised investors during its quarterly earnings call Wednesday by announcing plans to spend $190 billion on capital spending this year.
This is a significant deviation from analysts’ expectations. Microsoft’s current capital spending guidance is roughly the same as the $200 billion that rival Amazon says it plans to spend on capital expenditures in 2026.
Microsoft’s cloud revenue is growing, but not as fast as investors would like, especially given the power and supply chain constraints that are currently slowing the pace of data center development.
“We remain confident in the return on these investments,” said Microsoft CFO Amy Hood.
He added that with the additional investment, the company still expects near-term revenue growth to be constrained. Microsoft also plans to reduce its workforce in the coming quarters.
Amazon is in a similar situation. The company did not update its full-year capital spending outlook, but CEO Andy Jassy reassured investors that the investment was well worth it.
“We have already received a significant portion of customer commitments, so we are very confident that this will be successfully monetized,” Jassy said.
Amazon spent $44.2 billion on tangible equipment in the first quarter, up from $25 billion in the first quarter of 2025.
Jassy said the company is prioritizing efficiency and expects its use of Amazon’s in-house chip, Trainium, to give it a margin advantage.
Google, which has been investing heavily in AI models, has updated its full-year capital spending outlook to $180 billion to $190 billion, up from its previous forecast of $175 billion to $185 billion.
The company plans to “significantly increase” capital investment in 2027, but did not disclose specific numbers.
Google spent $35.7 billion on property, plant and equipment in the quarter, up from $17.2 billion in the first quarter of 2025.
The company’s cloud platform faces a $462 billion backlog.
“In the short term, there are compute constraints, and cloud revenues would have been higher had they been able to meet the demand,” said Sundar Pichai, CEO of Google’s parent company Alphabet.
Meta spent $19 billion on property, plant and equipment, up from $12.9 billion in the first quarter of 2025.
The company has adjusted its full-year capital spending outlook range to $125 billion to $145 billion. Previous expectations were for $115 billion to $135 billion.
“Most of this is due to rising component costs, particularly memory, but all the signs we’re seeing in our own work and across the industry give us confidence in this investment,” CEO Mark Zuckerberg said in a statement.
He said the company is focused on increasing efficiency through metacomputing initiatives.
“We’re deploying over a gigawatt of our own custom silicon that we’re developing with Broadcom, as well as a significant amount of AMD chips that complement the new Nvidia systems that we’re also deploying,” Zuckerberg said.