While Microsoft recently fell certain leases with its construction of data centers, both Amazon(Nasdaq: Amzn) And Alphabet(Nasdaq: Googl)(Nasdaq: Goog) Look ready to steam forward.
Microsoft still plans to spend about $ 80 billion in infrastructure Capital expenditure (CAPEX) For artificial intelligence (AI) This exercise, but its exercise ends in June, in only a few months. However, he takes a break of projects at an early stage, apparently because his needs and those of his partner of IA Openai move in different directions. For its part, Openai seeks to strengthen its own capacity; It is part of Project Stargate, which plans to spend $ 500 billion in AI data centers in the coming years.
However, Amazon and Alphabet both plan to spend big in 2025. Alphabet recently reiterated that it would spend $ 75 billion in the CAPEX data center this year, while Alphabet plans to spend about $ 100 billion. The potential impact of prices does not change their plans.
In a letter to the shareholders this month, the CEO of Amazon, Andy Jassy, qualified AI “a reinvention once alive as we know”, and said that it “moves faster than almost all that technology has ever seen”.
Meanwhile, during the recent Google Cloud ’25 conference in Las Vegas, the CEO of Alphabet, Sundar Pichai, said that “the opportunity with AI is as large as possible”.
The story suggests that Amazon and alphabet expenses will pay. Amazon has a long history of spending big on Capex to create his business. He built an entire storage and logistics network from zero in order to accelerate the delivery of the goods it sold. It was expensive, but helped transform the company into electronic commerce Behemoth is today.
He then turned around and did the same with Cloud Computing, mainly inventing the infrastructure industry as a service with Amazon Web Services (AWS), which is now his most profitable business. Many analysts initially questioned the company’s spending plans to develop AWS and doubted that this would become a profitable business.
Alphabet has also built its commercial expenses from Google Cloud with a lot of initial costs and has undergone initial losses. However, the fruits of this work began to shine until the last quarter when the Google Cloud segment has reached a profitability inflection point, the operating income increasing by $ 2.1 billion to $ 2.1 billion.
In 2017, analysts at Goldman Sachs Recognized a “historical relationship between accelerated investment periods and refereeing of income” on Amazon. They also noted that Amazon’s actions outperformed these intensive investment cycles.
Image source: Getty Images.
In his letter to the shareholders, Amazon noted that investments in the data center have available cash flow profiles (FCF) and return to return (ROIC), and that these assets have a useful lifespan from 15 to 20 years or more. He also predicted that the pricing of AI infrastructure would decrease, especially since more flea options are available outside Nvidia. Amazon also expects the inference to become the largest IA cost engine in the future, compared to the formation of models today.
With the inference planned to become more and more important, Amazon and Alphabet have developed their own personalized AI chips designed specifically for inference. Amazon said that its new trainium2 chip had a price / performance ratio of 30% to 40% that current graphic processing units (GPU). One of her greatest objectives is to make the inference cheaper for customers, who, according to her, will ultimately lead to overall IA expenses.
Meanwhile, Alphabet has just introduced its seventh generation AI chip, Ironwood. He said the new chip was designed for “the age of inference”, with an increased calculation power and memory capacity. This is the first alphabet chip designed specifically for inference, and was created to manage models which “provide the proactive generation of perspectives and interpretation”. It is also his most energy -efficient chip to date.
Amazon and alphabet invest massively in AI, and in the long term, these investments should bear fruit, in particular with Microsoft potentially slow down its expenses. The demand for cloud computing and AI services stimulates strong growth, because these companies help customers create their own models and AI applications and execute workloads on their platforms.
The two companies were also at the forefront of the development of personalized AI chips to help reduce IA infrastructure costs. While AI moves more towards inference, the two companies reduce the overall cost by developing fleas that consume less energy and are designed specifically to manage these tasks.
The AI also permeates the rest of their companies. Amazon uses AI to become more effective in its logistics and warehouse operations, and to make better product recommendations to its customers. Alphabet has made great progress with its new Gemini 2.5 model, quickly catching the AI race; This should help its research and advertising activities, as are certain revolutionary influence tools, such as its VEO 2 text generator with video.
With the recent market sale, the two actions are negotiated with attractive assessments. If history is an indication, the two will be long -term AI winners, making long -term solid investments.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Geoffrey Seiler has alphabet positions. The Motley Fool has positions and recommends Alphabet, Amazon, Goldman Sachs Group, Microsoft and Nvidia. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.
