AI Data Center Spending Rushes Toward $800 Billion

As Microsoft (NASDAQ: MSFT | MSFT Price Prediction), Meta, Alphabet, and Amazon (NASDAQ: AMZN) announced earnings, they reiterated the amounts they would spend on AI data centers, and some said they were committed to continued growth. A rise in memory chip costs will increase Microsoft’s spending to $190 billion, the company said on its earnings call. That figure would be 61% higher than it was in 2025. Meta put its figure at $145 billion at the top end of its spending estimate. The figure from just two makes the point. All in, the spending across the four companies is about half the entire US defense budget proposed for next year.

The figures from the four companies should be added to OpenAI, Anthropic, xAI, and a number of smaller price firms. And the group intends to do this amid higher chip prices, driven by both demand and an upcoming shortage of chips due to materials needed to make them, resulting from the Strait of Hormuz standoff.

The fact that the large corporate AI buildout is too expensive for the largest players to afford means that financial companies have started to put money on the table as they plan to make more back in a new industry.

The situation is so wild that Kevin O’Leary, a star of the “Shark Tank” TV show, is part of a group planning to build a 40,000-acre data-center facility in Utah. According to The Wall Street Journal, “That size would be equal to more than 20% of all data-center capacity currently operating in the U.S., according to data from real-estate firm Cushman & Wakefield.”

The worry from Wall St., which has not shown up in the stock prices of the megatech public companies, is that they have overspent. And that is the heart of the question. Will the overspending hit the wall of a lack of electricity or water? Will local officials block data center construction? Will the use of AI flatten in terms of either consumer demand or the needs of enterprise customers?

Any real roadblock to AI use will send the stocks of the megatech companies spinning down. Based on recent stock movements, investors don’t believe that it is a risk.