The Smart Investor·2026-01-22 09:30Core Insights - Big Tech companies are investing heavily in AI, with actual revenue backing these investments, distinguishing them from previous tech hype cycles [1][9][10] Meta: The AI Advertising Machine - Meta Platforms has developed AI-powered ad tools generating a US$60 billion annual run-rate, indicating strong monetization [2] - In Q3 2025, Meta's Family of Apps ad revenue exceeded US$50 billion, a 26% year-over-year increase, driven by a 14% growth in ad impressions and a 10% rise in average ad prices [3] - Meta's total spending for 2025 is projected between US$70 billion and US$72 billion, with plans for significantly larger expenditures in 2026 [3] Microsoft: The Enterprise AI Platform - Microsoft is positioning Azure as the preferred infrastructure for enterprise AI, with Azure and cloud services revenue growing 40% in Q1 FY26 due to AI demand [4] - Microsoft has untethered its future from OpenAI, allowing partnerships with competitors like Anthropic, and is investing up to US$15 billion in this area [5] - Microsoft’s enterprise relationships and tools like GitHub Copilot, which has 26 million users, provide a competitive edge [6] Alphabet: The Hidden Advantage - Alphabet processes 1.3 quadrillion tokens monthly, a 20-fold increase year-over-year, showcasing its infrastructure advantage [7] - Google Cloud revenue grew 33% year-over-year, with operating margins nearing 24%, and nearly 150 Cloud customers processing around one trillion tokens each [8] - Alphabet's seventh-generation TPU chips are a significant asset, with Anthropic signing a deal for access to one million TPUs [8] Summary of Financial Performance - Meta's AI-powered ad revenue stands at US$60 billion, Microsoft’s Azure AI business is growing at 40%, and Alphabet's Cloud division is experiencing 33% growth with expanding margins [9] - Unlike previous tech bubbles, current AI investments are yielding visible revenue, indicating a more sustainable growth trajectory [9][10]