Big Tech Holds $2 Trillion of Spending Commitments for AI Boom

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessBig Tech Holds $2 Trillion of Spending Commitments for AI BoomThe four largest players in the data center race have committed nearly $2.4 trillion in spending over the coming years, pointing to massive ongoing investment in AI infrastructure.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.2uxt4yl94)ltb9}r{[6lo(cl_media_dl_1.png Google(Bloomberg) — The four largest players in the data center race have committed nearly $2.4 trillion in spending over the coming years, pointing to massive ongoing investment in AI infrastructure.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAlphabet Inc., Meta Platforms Inc., Microsoft Corp. and Amazon.com Inc. have each reported ballooning commitments on leases, buildings, energy and other equipment over the last year as they’ve rushed to build fleets of data centers. This is a mix of short-term spending and some pledges that are as long as decades away.Take the example of Google parent Alphabet: Last week, it disclosed $902 billion of purchase commitments, contractual obligations and leases that have not yet commenced. That figure is more than nine times higher than it was a year earlier. The tally includes agreements for technical equipment, energy and leases, according to the company’s regulatory filing.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againMeta has reported a similarly sharp ramp-up, disclosing almost $700 billion in future spending. About half of that is for data center leases that haven’t yet started, and will be paid off over periods as long as 30 years. The company’s total commitments are more than eight times higher than a year earlier.Tech’s big debate this year has been whether the hundreds of billions being spent on server farms for artificial intelligence work will really pay off. Alphabet and Amazon have each tipped into negative free cash flow, with Meta expected to follow soon. All the companies signaled increased spending plans during their recent earnings reports, generally citing a need to capture massive demand for AI computing power.Not all of the spending is strictly tied to data centers, and each company discloses commitments in slightly different ways, making it difficult to compare them directly. For example, Meta notes that some of its planned spending is related to consumer hardware products in the Reality Labs division. Alphabet and Amazon each note planned spending on content licenses.On Thursday, Amazon Chief Executive Officer Andy Jassy argued that the company was essentially going through an accelerated version of the first Amazon Web Services cloud unit build-out, where steep spending in early years will lead to great returns later on. Even allocating $220 billion in capital expenditures this year won’t be enough to meet all of its cloud infrastructure demand, he said. AWS reported a 37% jump in revenue in the second quarter, the fastest pace of growth since the end of 2021. —With assistance from Neil Callanan.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.