Big Tech lifts 2026 AI capex to $725bn

Major technology companies, including Alphabet (GOOGL), Microsoft (MSFT) and Meta (META), have sharply increased their capital expenditure plans tied to artificial intelligence for 2026. Collective AI related spending by these Big Tech firms is now projected to reach $725 billion, compared with earlier estimates of $670 billion.

The upgraded projections underline how central AI has become to the strategies of the largest US technology groups. The companies are committing substantial resources to data centres, specialised chips and cloud infrastructure to support expanding AI services and applications.

Alphabet has lifted its full year 2026 capital expenditure guidance to a range between $180 billion and $190 billion. The company’s updated outlook reflects rising demand for its AI driven services across consumer and enterprise markets.

The higher spending plans place Alphabet at the forefront of the current investment cycle among its peers. Its commitment is focused on scaling computing capacity and cloud infrastructure needed to train and deploy advanced AI models.

In the first quarter of 2026, Google Cloud reported revenue of $20 billion, representing 63% year over year growth. This performance highlights the rapid expansion of Alphabet’s enterprise cloud business as customers adopt AI enabled products.

The cloud division has become a key driver of Alphabet’s broader AI strategy, providing the infrastructure and tools that underpin many of the company’s artificial intelligence offerings for corporate clients.

Alphabet reported an enterprise cloud computing backlog of $462 billion. The company expects this backlog to convert into revenue over the next 24 months.

The scale and duration of the backlog indicate that a substantial portion of Alphabet’s future revenue is already under contract, giving visibility to the returns that may be generated from its enlarged AI and cloud investments.

The rapid increase in AI related capital expenditure among Alphabet, Microsoft (MSFT) and Meta (META) points to an intensifying race to secure leadership in AI infrastructure and services. Each company is investing heavily to meet anticipated demand from developers and enterprises.

As spending plans rise, competitive focus is shifting toward performance, reliability and scale of cloud platforms and AI tools. The ability to translate large upfront investments into sustained revenue growth, as seen in Google Cloud’s recent results, is emerging as a key differentiator.