Microsoft is speeding up in the AI race.<\/p>\n
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The tech giant surprised investors on its quarterly earnings call on Wednesday by announcing plans to spend $190 billion in capital\u00a0expenditures<\/a>\u00a0this year.<\/p>\n It’s a big jump from analysts’ estimates. Now, Microsoft’s capex guidance is nearly as high as the $200 billion its rival Amazon has said it will spend on capex in 2026.<\/p>\n Microsoft’s cloud revenue is growing, though not quite as fast as investors would like, especially given power and supply chain constraints that slow the current pace of data center development.<\/p>\n “We remain confident in the return on these investments,” Microsoft CFO Amy Hood said.<\/p>\n She added that, with the additional investment, the company still expects short-term revenue growth to be constrained. Microsoft also plans<\/a> to decrease its head count in the coming quarters.<\/p>\n Amazon is in a similar boat. While the company did not update its full-year capex guidance, CEO Andy Jassy reassured investors that the investment would be worth it.<\/p>\n “We have high confidence this will be monetized well, as we already have customer commitments for a substantial portion of it,” Jassy said.<\/p>\n Amazon spent<\/a> $43.2 billion in capex for AWS and generative AI this past quarter. It spent $44.2 billion on property and equipment in the first quarter, up from $25 billion in Q1 of 2025.<\/p>\n Jassy said the company is prioritizing efficiency and expects that using Trainium, Amazon’s in-house chips, will give the company an edge in profit margins.<\/p>\n Google, which is investing<\/a> heavily in its AI models<\/a>, updated its full-year capex guidance range to $180 billion to $190 billion, up from its earlier forecast of $175 billion to $185 billion.<\/p>\n The company plans to “significantly increase” capital expenditures in 2027, though it did not provide a specific figure.<\/p>\n Google spent $35.7 billion on capex this quarter, up from 17.2 billion the same time last year.<\/p>\n The company’s cloud platform is facing a $462 billion backlog.<\/p>\n “We are compute-constrained in the near term, and cloud revenue would have been higher if we had been able to meet the demand,” said Sundar Pichai, CEO of Google parent company Alphabet.<\/p>\n