Three major U.S. tech companies—Microsoft, Meta, and Google—announced significant financial results on Wednesday, showcasing hefty profits and even larger infrastructure expenditures, raising concerns about a potential AI market bubble.
Meta revealed that its capital expenditures for the year would rise to between $70 billion and $72 billion, surpassing its previous estimate of $66 billion to $72 billion. CFO Susan Li indicated that spending would be “notably larger” next year. The company’s revenue reached $51.24 billion in the last quarter, marking a 26% increase year-over-year. CEO Mark Zuckerberg emphasized the need to aggressively invest in AI infrastructure to capitalize on future advancements. Meta has also been actively recruiting AI talent, offering lucrative compensation to attract top researchers.
Alphabet, Google’s parent company, projected capital expenditures of $91 billion to $93 billion for 2025, a significant jump from an earlier estimate of $75 billion. As revenues climbed to $102.3 billion for the third quarter—a 33% year-over-year surge—most of this spending is expected to support AI initiatives and data center expansions. Google’s Gemini AI app has reported 650 million monthly active users, reflecting its growing influence in the market.
Microsoft, meanwhile, reported revenues of $77 billion for its third quarter, an 18% increase from the previous year. The company allocated $34.9 billion toward capital expenditures, largely for AI infrastructure, with this figure reflecting a nearly 74% rise compared to last year’s quarter.
Despite these robust financial plans, analysts are voicing concerns regarding the sustainability of such high investments in AI. There are fears that an overinflated market could lead to a future downturn, especially as companies announce substantial long-term investments in data centers. For instance, Nvidia has pledged “up to $100 billion” to back OpenAI’s data center projects, while OpenAI recently announced plans for $1.4 trillion in computing resources.
Microsoft’s ongoing investment in OpenAI also faces scrutiny, with the company reporting a $3.1 billion loss attributed to this partnership. CEO Satya Nadella discussed Microsoft’s strategy to maintain flexibility in its data centers, emphasizing continuous modernization to adapt to future demands.
Mark Moerdler, a senior research analyst, noted that Microsoft’s gradual capacity building affords some protection against market fluctuations but did not dismiss the notion of an AI bubble.
