Artificial intelligence is no longer speculative narrative—it’s the largest corporate investment cycle in history. Nvidia became the first company to break the $5 trillion market cap barrier, consolidating the absolute dominance of the AI ecosystem. At the same time, Alphabet, Amazon, Meta, and Microsoft collectively raised their capex plans to more than $380 billion just for 2025, with even higher projections for 2026. The question now isn’t whether AI will transform the economy, but whether returns will justify these monumental capital outlays.
Capex Spending Has Redefined Risk-Return
Big Tech is investing on an unprecedented scale. Microsoft spent $34.9 billion in capex last quarter, nearly double the previous quarter, and projects $94–140 billion for fiscal 2026. Amazon raised its capex guidance to $125 billion for 2025. Alphabet updated its projections to $91–93 billion, and Meta now projects $70–72 billion.
The Big Four Dominate, OpenAI Disrupts
Nvidia reported $130.5 billion in annual revenue (+113% YoY) with operating margins above 60%. Microsoft grew revenue by 18% to $77.7 billion, with Azure up 40%. Amazon’s capex projection hit $125 billion. Alphabet posted a record $102.3 billion in quarterly revenue. Meta increased capex guidance to $70–72 billion. OpenAI completed a secondary sale at a $500 billion valuation and prepares for a record IPO.
Semiconductors: Insatiable Demand Amid Volatility
Morningstar’s Global Semiconductor Index gained 34% in 2025, led by Micron Technology at +126.47%. Broadcom emerged as a strong second player. Global semiconductor sales are projected at $697 billion for 2025 (+11% YoY).
Private Equity Accelerates: OpenAI Redefines Valuations
AI deals grew 49% YoY; corporate venture capital now accounts for 75% of US AI funding rounds. BigBear.ai acquired Ask Sage for defense and regulated sectors.
Macro Productivity and Labor Disruptions
AI will boost productivity by 1.5% by 2035, 3% by 2055, and 3.7% by 2075 according to Wharton. Goldman Sachs projects AI will raise US labor productivity by 15%. Generative AI could displace 300 million jobs globally.
Sectoral Transformation
- Healthcare: AI improves detection rates by 27–31%.
- Finance: Fraud detection up 23pp, AI capex $41.5B in 2023.
- Manufacturing: Robotics and supply chain optimized; Infineon collaborating with Nvidia on next-gen AI servers.
The Risk: Bubble or Inflection Point?
Big Tech capex is outpacing sales growth; some analysts warn about the rate being unsustainable. November’s correction wiped $500 billion off global market value, fueling the bubble debate.