Big Tech companies are going all in on artificial intelligence. They plan capital expenditure above 700 billion dollars this year. That equals about 590 billion euros and marks a rise of roughly 75 percent compared to 2025. Several companies reported earnings and shared spending forecasts for 2026. Leading analysts also published projections that confirm this trend.

Wall Street focuses heavily on the combined capital expenditure figure. The market sees more than 700 billion dollars flowing into AI infrastructure. That amount exceeds Sweden’s entire nominal GDP for 2025, according to IMF estimates.

Global chip sales are also set to reach one trillion dollars for the first time this year. The US Semiconductor Industry Association provided this projection. Major banks and consulting firms like JPMorgan Chase and McKinsey expect total AI capital expenditure to exceed five trillion dollars by 2030. They cite extraordinary demand for computing power.

Capital expenditure refers to money companies spend on long-term assets like property, equipment, and technology. These investments aim to boost capacity and efficiency over several years. Companies do not deduct these costs in a single year. They capitalise them on the balance sheet and depreciate them over time. Analysts use CapEx as a key indicator of long-term growth strategy and operational strength.

The current surge confirms a pivot that began in 2025. Big Tech spent an estimated 400 billion dollars on AI capital expenditure that year. Nvidia CEO Jensen Huang described this trend as the largest infrastructure build-out in human history. He repeated this view at the World Economic Forum in Davos last month.

Hyperscalers Bet Everything on AI Infrastructure

Amazon leads the spending race for 2026. The company plans to invest around 200 billion dollars alone. That single figure exceeds the combined nominal GDP of the three Baltic states in 2025, based on IMF projections.

Alphabet follows with 185 billion dollars, while Microsoft and Meta plan 145 billion and 135 billion dollars respectively. Oracle raised its 2026 capital expenditure to 50 billion dollars, almost 15 billion above earlier estimates.

Tesla expects to nearly double spending to almost 20 billion dollars. The company wants to scale its robotaxi fleet and accelerate development of the Optimus humanoid robot. Another Elon Musk venture, xAI, plans to spend at least 30 billion dollars in 2026.

The company will build a new 20 billion dollar data centre called MACROHARDRR in Mississippi. The state’s governor called it the largest private sector investment in Mississippi’s history. xAI will also expand the Colossus cluster in Tennessee, which Musk described as the world’s largest AI supercomputer.

SpaceX acquired xAI in an all-stock transaction at the start of this month. The deal valued SpaceX at one trillion dollars and xAI at 250 billion dollars. The combined entity now carries a valuation of 1.25 trillion dollars and ranks among the largest private companies in history.

Reports suggest SpaceX plans an IPO this year. Morgan Stanley is reportedly in talks to manage the offering, which would include exposure to xAI. Musk said the goal is to build an integrated innovation engine combining AI, rockets, and satellite internet. He also outlined long-term plans for space-based data centres powered by solar energy.

Apple continues to lag in spending with a projected 13 billion dollars. The company announced a multi-year partnership with Google to integrate Gemini models into Apple Intelligence. The collaboration will overhaul Siri and enhance on-device AI features. Apple effectively outsources significant investment by relying on external partners instead of scaling its own capital expenditure.

Nvidia will report earnings and projections on 25 February. The company sells AI chips and is expected to capture a large share of Big Tech spending. Data centre build-outs will drive much of that demand. Jensen Huang previously estimated that each gigawatt of data centre capacity costs between 50 and 60 billion dollars. He said around 35 billion dollars of each project typically goes to Nvidia hardware.

Wall Street Weighs Risk and Reward in the AI Capital Rotation

Investors have mixed reactions to the massive spending plans. Many understand the urgency of building a competitive edge in artificial intelligence. Others worry about the sheer scale of the investments and rising debt levels.

Morgan Stanley estimates hyperscalers will borrow around 400 billion dollars in 2026. That figure more than doubles the 165 billion borrowed in 2025. Analysts warn this could push high-grade US corporate bond issuance to a record 2.25 trillion dollars this year.

Projected AI revenue for 2026 remains far below spending levels. Analysts highlight risks like rapid hardware depreciation and soaring energy costs. The entire strategy depends heavily on future success. Google CEO Sundar Pichai admitted that the current spending pace includes elements of irrationality.

Rothschild & Co analyst Alex Haissl downgraded Amazon and Microsoft in November. He argued investors value their capital expenditure plans as if legacy cloud economics still applied. He warned AI economics will likely be far more expensive than markets expect.

Michael Burry also voiced concerns and compared the AI boom to a potential bubble. He pointed to unsustainable capital expenditure and warned of excessive optimism. Big Tech’s AI race relies heavily on leverage, and outcomes remain uncertain. Nvidia currently benefits significantly, while Apple follows a distinct strategy by partnering instead of spending heavily.

Europe Faces a Growing Industrial and Financial Gap

The massive spending spree raises urgent questions about Europe’s ability to compete. The AI race has become a battle of balance sheets, and Europe faces a stark contrast. American firms mobilise nearly 600 billion euros in a single year. Coordinated EU efforts do not match the spending power of even the smallest US tech giant.

Brussels launched the AI Factories initiative and the AI Continent Action Plan to mobilise public and private investments. These programmes aim to strengthen Europe’s AI ecosystem and infrastructure. However, the numbers reveal a large gap. European sovereign cloud data infrastructure spending is forecast to reach only 10.6 billion euros in 2026.

That represents an 83 percent year-on-year increase, but it remains negligible compared to US investments. Mistral AI CEO Arthur Mensch said US companies build the equivalent of a new Apollo programme every year. He also argued Europe cannot regulate its way to computing supremacy.

Mistral represents one of Europe’s few strong challengers. The company follows Big Tech’s strategy by expanding its physical footprint aggressively. It raised 1.7 billion euros in a Series C round in September 2025 at a valuation close to 12 billion euros. ASML led the round with a 1.3 billion euro investment.

Mensch confirmed a one billion euro capital expenditure plan for 2026. Mistral also announced a 1.2 billion euro investment to build a data centre in Borlänge, Sweden. The project partners with EcoDataCenter and aims to deliver sovereign compute under strict EU data standards. Sweden’s abundant green energy will support the facility.

The data centre will open in 2027 and provide high-performance computing for next-generation AI models. It marks Mistral’s first infrastructure project outside France and a core pillar of European data sovereignty.

US tech giants also offer so-called sovereign-light solutions in Europe. They launch localised cloud zones in countries like Germany and Portugal and promise data residency. Critics argue these systems remain dependent on US parent companies. They warn Europe remains vulnerable to American economic shifts and foreign policy decisions.

As 2026 unfolds, the stakes are clear. The United States bets heavily on AI dominance and its credit capacity. Europe relies on targeted investments and regulation to carve out a sovereign niche in a world increasingly shaped by American technology.