Artificial Intelligence Swallows Billions… Spending Surpasses U.S. Education and Labor Budgets - Jordan News

Jordan News

4 days ago

Artificial Intelligence Swallows Billions… Spending Surpasses U.S. Education and Labor Budgets By 2025, leading American companies had spent nearly $155 billion on AI development, competing fiercely to outspend one another—an amount that exceeds the U.S. government's total expenditure on education, training, employment, and social services in the current fiscal year. اضافة اعلان According to the latest financial disclosures from major Silicon Valley firms, this spending race is expected to accelerate, potentially reaching hundreds of billions of dollars in a single year. Over the past two weeks, Meta, Microsoft, Amazon, and Alphabet (Google's parent company) released their quarterly financial reports. Each company revealed that their year-to-date capital expenditures (CapEx)—which represent spending on physical assets such as servers and data centers—had already reached tens of billions of dollars. "CapEx" has become a shorthand indicator for tech giants' AI investments, as AI requires massive physical infrastructure: high-performance data centers that consume enormous amounts of electricity, water, and costly semiconductor chips, according to a report by The Guardian. Google stated its CapEx 'primarily reflects investments in servers and data centers to support AI.' Meanwhile, Meta reported CapEx of $30.7 billion year-to-date—double the $15.2 billion it had spent in the same period last year. In the last quarter alone, Meta spent $17 billion, again double the $8.5 billion it spent in Q2 2024. Alphabet reported nearly $40 billion in CapEx for the first two quarters of this fiscal year, and Amazon reported $55.7 billion. Microsoft announced plans to spend over $30 billion in the current quarter alone to build AI data centers. CFO Amy Hood said this would be at least 50% more than what was spent during the same period last year and higher than the company's record CapEx of $24.2 billion in the quarter ending in June. Hood emphasized: 'We will continue investing in upcoming opportunities.' Looking ahead, Big Tech's total CapEx is expected to skyrocket in the next fiscal year, surpassing even last year's record figures. Microsoft CEO Satya Nadella said Wednesday that the company plans to spend approximately $100 billion on AI in the next fiscal year. Meta is planning to spend between $66–72 billion, Alphabet aims for $85 billion (up from its earlier estimate of $75 billion), and Amazon projects spending $100 billion, primarily through Amazon Web Services, which analysts expect to hit $118 billion. Collectively, these four companies are forecasted to spend over $400 billion on CapEx in the coming year, according to The Wall Street Journal—a figure that exceeds the EU's quarterly defense budget. Despite these mind-boggling sums, some investors believe Big Tech still isn't spending enough. Microsoft, Google, and Meta each told Wall Street analysts last quarter that their CapEx would exceed earlier estimates. Investor reaction was overwhelmingly positive: the stock prices of all three surged following their earnings reports. Microsoft's market cap soared to $4 trillion the day after its report. Even Apple, traditionally the most cautious of the tech giants, signaled a significant ramp-up in AI spending next year, through internal investments or acquisitions. Its quarterly CapEx rose to $3.46 billion, up from $2.15 billion in the same period last year. On Thursday, Apple announced robust earnings, buoyed by strong iPhone sales and better-than-expected performance in China, though it still lags behind other tech giants in rolling out AI products. CEO Tim Cook said Thursday that Apple is reallocating "a fair number" of employees to focus on AI, adding: 'The core of our AI strategy' is to increase investment and integrate AI into all devices and platforms. However, Cook declined to disclose how much the company plans to spend, saying only, 'We are significantly expanding our investments, but I won't put specific numbers on it.' According to The Guardian, smaller firms are scrambling to keep up with the AI spending spree. OpenAI recently announced it had raised $8.3 billion as part of a planned $40 billion funding round, bringing the startup's valuation to an estimated $300 billion—just three years after launching its groundbreaking chatbot, ChatGPT, in 2022.
— (Agencies)