Skyrocketing component prices push Big Tech capex to record $725 billion — Microsoft alone attributes $25 billion of AI budget to increased memory and chip costs

Big Tech companies like Google, Amazon, Microsoft, and Meta are set to collectively spend a record $725 billion on capital expenditure in 2026, a significant increase from the previous year. Rising memory chip prices are a key factor in pushing these budgets higher, with Microsoft attributing $25 billion of its AI budget to increased component costs. Google's cloud revenue saw substantial growth, surpassing competitors like Amazon Web Services and Microsoft Azure. These companies are also investing in custom AI chips and developing their own accelerators to reduce reliance on third-party suppliers like Nvidia. Despite the record spending, supply constraints remain a challenge that additional capital alone cannot resolve.