Amazon and Google are winning the AI capex race — but what's the prize?

Core Insights - The AI industry is heavily investing in data centers, with the belief that the company with the most compute power will dominate the market in the future [1][6] Company Projections - Amazon projects $200 billion in capital expenditures through 2026, a significant increase from $131.8 billion in 2025, with investments in AI, chips, robotics, and satellites [3] - Google anticipates capital expenditures between $175 billion and $185 billion for 2026, up from $91.4 billion the previous year, indicating a substantial increase in fixed asset spending [4] - Meta forecasts $115 to $135 billion in capex for 2026, while Oracle projects $50 billion, and Microsoft’s recent quarterly figure suggests a potential $150 billion if trends continue [5] Investor Sentiment - Despite the high capital expenditures, investor confidence is wavering, with stock prices of these companies dropping as they commit hundreds of billions to AI [6][10] - The pressure is not only on companies like Meta, which are still developing their AI strategies, but also on established players like Microsoft and Amazon, as the overall spending levels are causing investor discomfort [7] Industry Dynamics - The tech industry views high-end compute as a critical resource for future survival, leading to aggressive spending strategies among major companies [6] - There is a growing concern that big tech firms will need to manage perceptions of their AI investments to maintain investor confidence, despite the belief in AI's transformative potential [10]