Global AI spend to rise 60% in 2025 even as Microsoft, Amazon, Alphabet, Meta share drops: UBS

Time of India

05-05-2025

HighlightsGlobal artificial intelligence spending is projected to increase by 60 percent year-on-year in 2025, reaching $360 billion, and further rising by 33 percent in 2026 to $480 billion. The share of spending attributed to the Big Four technology giants — Microsoft, Amazon, Alphabet, and Meta — is expected to decline from 58 percent in 2025 to 52 percent in 2026, indicating a broader distribution of AI investments. China is anticipated to contribute significantly to AI spending, accounting for 35 percent of the total spend outside the Big Four, driven by low-cost models, strong government support, and the rising use of AI in consumer applications.
Global
artificial intelligence
(
AI
) spending is projected to rise significantly in the coming years, with UBS estimating a 60 per cent year-on-year increase in 2025, to $360 billion.
The momentum is expected to continue in 2026, with a further 33 per cent rise to $480 billion.
However, the share of spending attributed to the Big 4 tech giants —
Microsoft
,
Amazon
,
Alphabet
, and
Meta
— is anticipated to decline, falling from 58 per cent in 2025 to 52 per cent in 2026.
The report said "we expect global AI spend to increase by 60 per cent y/y in 2025 to reach $360 billion and 33 per cent in 2026 to reach $480 billion... We expect the combined share of these companies as a percentage of AI spend to rise from less than 20 per cent in 2023 to more than 40 per cent in 2025".
It also highlighted that this broadening of AI spending across a more diverse set of players is a healthy development for the overall AI theme. A reduced concentration of investment among a few companies could eventually lead to less volatility in the market, the report said.
Spending outside the Big 4 is expected to reach a robust $150 billion in 2025. A significant portion of this is projected to come from
China
, which is likely to account for 35 per cent of the total spend outside the Big 4.
According to UBS, the rise in China's AI investments is being driven by the success of low-cost models such as DeepSeek, strong government support, and the growing use of AI in consumer-facing applications like e-commerce, social media, and advertising.
The report mentioned that the Neocloud providers — companies offering specialized AI-integrated cloud services — are also emerging as a key segment, expected to capture around 25 per cent of the non-Big 4 AI spending in 2025.
The remaining spend is likely to come from other hyperscalers and enterprise or sovereign cloud providers, including players such as
Oracle
and Softbank.
While UBS advises investors to continue monitoring guidance from the Big 4, the report emphasises that other AI-focused companies are now accelerating their investments and are crucial to the ongoing resilience of the sector.