Big Tech’s AI spending reached a record-breaking $240 billion
Data technology update site Dataconomy reported that the largest tech companies have spent a jaw-dropping $240 billion in 2024.
In contrast, Big Tech’s capital expenditures (capex) skyrocketed to nearly $74 billion in 2023, which reached approximately $109 billion by Q3.
READ: Google emissions increase by 48% due to its AI
The expenditures reached $104 billion by the first half of 2024, representing a 47% year-over-year increase.
What are the factors behind Big Tech’s AI spending?
CHART: Big Tech is going wild on AI spending next year and beyond https://t.co/M6rnvGOgwA
— Insider Tech (@TechInsider) November 5, 2024
Big Tech includes the largest digital firms worldwide, such as Meta, Microsoft, and Alphabet, Google’s parent company.
Article continues after this advertisementDataconomy lists these reasons behind Big Tech’s growing AI expenditures:
- Market opportunity: Massive tech companies expect artificial intelligence to have a cumulative global economic impact of $20 trillion by 2030.
- Infrastructure demands: Big Tech continues to build more ambitious AI models, which require massive computing resources costing huge sums.
- Emerging revenue streams: Tech firms are reporting multi-billion dollar revenues from AI integrations. For example, Microsoft expects its AI business to surpass a $10 billion annual revenue run rate by Q2 2025.
The accelerating AI spending comes as Microsoft, Amazon, and other firms aim to meet increasingly high demand.
For instance, Microsoft’s capex reached $10 billion in the latest quarter. Consequently, it must continue fulfilling its cloud and AI service requirements.
CFO Amy Hood noted that an influx of supply through the second half of 2024 would enable Microsoft to match growing demand.
Nowadays, limited capacity has been interrupting growth despite “more demand than we could fulfill if we had even more capacity today.”
Dataconomy reports AI spending may sustain its momentum through 2025 as Big Tech harnesses more growth opportunities.
Soon, their investments will accelerate artificial intelligence’s integration into our lives. In response, you should learn more about how this technology can benefit you.
Start by reading the most important AI terms from this guide.
