AI Capital Surge: Big Tech Doubles Down

A world where big tech companies are racing to outspend each other. Well, that's exactly what's happening. Amazon is leading the charge. They are spending over $100 billion and still plan to spend even more. This is largely to build more data centres . There is a good reason for this. These companies are competing to be the best at AI. However, this isn't the first time these companies have gone big with their spending. In 2024, they spent $246 billion, which was a 63% increase compared to the previous year Now, let's talk about why this is happening. These companies are all about AI research. Their goal is to build the best data centres and fill them with special chips. This will help them stay ahead in the AI game. The investinghas left the market on edge. You see, the market took a hit. A Chinese startup, DeepSeek, launched an affordable AI model. This caused a lot of panic. Microsoft and Alphabet (Google’s parent company) both saw their market value drop by $200 billion. This was partly because their cloud computing divisions didn’t grow as fast as expected. Plus, they are spending a lot on AI. Investors are becoming skeptical. They worry that all this spending might not pay off. This could mean less money for shareholders and other parts of the business. Microsoft and Google have seen mixed results so far. Google hasn't been as clear about how much they're making from their AI chatbot, Gemini. Companies aren't rushing to use Microsoft's Copilot. This is because it's costly and not always reliable. This all adds to the investor worries. But the rush to invest isn't just about these big players. Amazon isn't the only one doing it. Google is also stepping up their spending. Microsoft's plans for Azure are also huge. This is the cloud service they offer. They plan to spend $80 billion on this. They think it's worth it to stay ahead in the AI game. And what about DeepSeek? Their model is a good example of the fears. They offered something similar to big tech companies at a lower cost. This shows that there are cheaper ways to do AI. This makes investors nervous However, the competition doesn't stop at big tech. Even smaller companies are getting into the game. Open AI has partnered with SoftBank and Oracle. They plan to invest a lot into AI infrastructure. This is another sign that AI is a big deal. But it also means there are risks The spending isn't slowing down. Even with the uncertainty, these companies are still going all in. Their profits are up, but so are investor concerns. Will this spending lead to a big AI boom or a bust like the dot-com bubble? It's a big question. And it's not just about the money. It's about what this means for AI and technology as a whole