Hyperscalers Continue to Hyperspend on AI
Earnings reports from the largest public cloud providers show that AI infrastructure spending continues to grow beyond analyst expectations. And executives at Alphabet, Amazon, Meta, and Microsoft expect capital expenditures (capex) to increase in 2025 on the back of still more AI buildout. All of which prompts questions about whether they'll be able to sustain the spending and when it's going to pay off.
For the quarter ended September 30, 2024, the top four hyperscalers collectively spent $58.9 billion on capex, representing a 63% growth rate and amounting to about 18% of their aggregate revenues of $293,319 billion.
And there’s evidence that capex isn’t matching the growth of revenues, as shown in the chart below:
Source: Company reports
Plans for More Spending Next Year
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