Cloud giants pour nearly $600B into capex as AI demand surges
Revenue is soaring, yet hyperscalers say they still cannot build capacity fast enough
As AI demand surges, the three cloud industry giants - Amazon, Google, and Microsoft - have collectively poured nearly $600 billion into capital expenditures. Amazon disclosed a 36.7% year-on-year increase for its Amazon Web Services (AWS) division, which generated $42.2 billion in the second quarter of 2026. CEO Andy Jassy revealed that AWS is now an annualized revenue run rate business worth $169 billion, placing it amongst the Fortune 500.
Jassy predicts spending around $220 billion on cash capex in 2026, driven by the high cost of memory, GPUs, and other essential components for AI workloads. Google updated its capex guidance for 2026, now estimating $195 to $205 billion, with the increase attributed to the need to meet growing demand. Microsoft expects its calendar 2026 capex to be around $175 billion, a slight reduction from a previous figure but still exceeding $50 billion in its next quarter due to lease reclassification impacts.
Despite significant investments, all three companies acknowledge shortages in memory, GPUs, and hard disks, which are driving enterprises to shift to cloud services.
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