Source: Morning Brew
Alphabet, Amazon, Meta, and Microsoft are treating AI capex as table stakes for market dominance, not discretionary spending. Capex growth is outpacing revenue gains. Some companies report double-digit increases. The bet is explicit: whoever builds the largest, most capable compute clusters controls the next computing paradigm. This is about securing asymmetric advantages in foundation models and inference capacity, not quarterly earnings. The spending pattern creates a dependency trap. All four are locked into a capital arms race that punishes restraint. Any one pulling back on AI spending would be read as capitulation and trigger immediate market repricing. Margins are under pressure in the near term, but the companies are absorbing those costs as the price of entry.