while Microsoft Some lease contracts recently fell with the construction of their data center, both Amazon(Nasdaq: amzn) and alphabet(Nasdaq: Googl)(Nasdaq: Goog Look ready to go fully steam forward.
Microsoft is still planning to spend about $ 80 billion on infrastructure Capital expenses (CAPEX) for artificial intelligence (AI) in this fiscal year, but its financial year ends in June, just two months from now. However, it temporarily stops some projects in the early stage, apparently because its needs and its partner in AI are moving in different directions. For its part, Openai is looking to build its own ability; It is part of Project Stargate, who plans to spend $ 500 billion on artificial intelligence data centers over the next few years.
However, Amazon and Alphabet planned a great spending in 2025. Alphabet recently repeated that he will spend $ 75 billion in Cand Center Capex this year, while Alphabet plans to spend about $ 100 billion. The potential effect of definitions does not change their plans.
In a letter to shareholders this month, the CEO of Amazon and Jassy described the artificial intelligence as “a single re -invention of everything we know”, and said he “moves faster than almost anything than anything you have seen.”
Meanwhile, at the last Google Cloud Next ‘conference in Las Vegas, the CEO of Alphabet Sundar Pichai said that the opportunity with artificial intelligence is as great as you get. “
History indicates that Amazon and Alphabet expenses will pay fruits. Amazon has a long history of great spending on Capex to build her business. She built a fully logistical warehouse network and services from the zero point in order to accelerate the delivery of the goods he sold. This was expensive, but it helped convert the company into E -commerce Giant is today.
Then I turned and did the same with cloud computing, and the infrastructure industry invented mainly as a service with Amazon Web Services (AWS), which is now its most profitable works. Many analysts initially questioned the company’s spending plans to build AWS and doubted that it would become a profitable job.
Alphabet has also built Google Cloud’s tunnels for her business with a lot of costs, and bears initial losses. However, the fruits of this work began to shine during the last quarter when the Google Cloud sector reached the point of profitability, with an increase in operating income by 142 % to $ 2.1 billion.
Once again in 2017, analysts in Goldman Sachs “The historical relationship between accelerating investment and revenue resist” has admitted in Amazon. They also pointed out that Amazon’s shares excelled in the wake of these intensive investment sessions.
Photo source: Getty Images.
In her letter to shareholders, Amazon noticed that the data center investments have an attractive free cash flow (FCF) and the ROIC Capital Coemaria, and that these assets have a useful age from 15 to 20 years or more. An artificial intelligence infrastructure would also have decreased, especially with more chips options abroad Nafidia. Amazon also expects the inference the largest engine for artificial intelligence in the future, compared to typical training today.
Although the inference is increasing importance, Amazon and Alphabet developed the designated artificial intelligence chips specifically designed to infer. Amazon said that the new Tradium2 chip has a rate to 40 % to 40 % of the current graphics processing units (GPU). One of its biggest goals is to make the inference less expensive for customers, which is believed to eventually lead to more general spending on artificial intelligence.
Meanwhile, Alphabet just offered a seventh generation AI chip, Ironwood. He said that the new slide was designed for “the age of reasoning”, while increasing the capacity of the account and memory capacity. This is the first segment of Alphabet specifically designed for reasoning, and has been created to deal with models that “provide the pre -emptive generation of ideas and interpretation.” It is also a more efficient energy segment so far.
Amazon and Alphabet are invested extensively in artificial intelligence, and in the long run, these investments must be paid, especially with the dumping of Microsoft spending. The demand for cloud computing and artificial intelligence services leads to strong growth, as these companies help customers create their artificial artificial models and applications and run the burdens of artificial intelligence work on their platforms.
Both companies were also at the forefront of developing artificial intelligence chips to help reduce the costs of Amnesty International. With artificial intelligence more towards inference, both companies reduce the total cost by developing chips that consume less energy and are specially designed to deal with these tasks.
Artificial intelligence also permeates the rest of their works. Amazon is used by Amnesty International to become more efficient in logistical services and warehouses, and to provide better product recommendations to its customers. Alphabet has made great steps with the latest Gemini 2.5, and soon to catch up in the artificial intelligence race; This should help research and advertisements, as well as some leading artificial intelligence tools, such as its generator at Veo 2 Text to-VIDEO.
With the last market sales, both shares are traded with attractive reviews. If history is any indicator, both of which will be winning long -term artificial intelligence, making them strong investments in the long run.
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John Maki, former Chole Foods Market, a affiliate company, a member of the Motley Fool Board of Directors. Susan Fry, CEO of Alphabet, is a member of the Motley Fool Board of Directors. Jeffrey Siller He has positions in the alphabet. Motley Fool has positions in Alphabet, Amazon, Goldman Sachs Group, Microsoft and Nvidia. Motley Fool recommends the following options: Long January $ 2026 $ 395 on Microsoft and Short January 2026 $ 405 calls on Microsoft. Motley deception has Disclosure.
