Capital Expenditures of Four Major ICPs in U.S. Surged by 62% in Q1

In the first quarter of 2025, the four major Internet content providers (ICP) in the United States – Google, Microsoft, Meta and Amazon – are active in capital expenditure, with a total investment of nearly $72 billion, up 62% year on year, mainly focusing on AI infrastructure and cloud computing expansion. The financial reports of four companies show that the global AI competition and geopolitical risks are driving their accelerated investment, despite facing external pressures such as tariffs and supply chain fluctuations.

Google: AI investment accelerates comprehensively

Google’s parent company Alphabet’s capital expenditure in the first quarter reached $17.2 billion, a year-on-year increase of 53%, mainly used for data centers and AI model training. The company announced a capital expenditure plan of $75 billion for the full year of 2025, a significant increase from 2024. Google CEO Sundar Pichai emphasized during the earnings call that the widespread use of AI tools such as Gemini and AI Overviews is driving user search volume and advertising revenue growth. Despite facing headwinds from tariff policies for retail customers in the APEC region, Google still plans to improve efficiency by optimizing its supply chain and utilizing AI technology to offset cost pressures.

Microsoft: Azure cloud business becomes the core driving force

Microsoft’s capital expenditure in the first quarter reached $16.75 billion, a year-on-year increase of 53%, mainly used for Azure cloud services and AI infrastructure expansion. Its intelligent cloud business revenue increased by 21% year-on-year, while Azure revenue surged by 33%, with AI contributing 16%. Microsoft CEO Satya Nadella stated that cloud and AI are key tools for enterprise growth. Although the company expects potential AI capacity limitations in the future, it will continue to maintain high capital expenditures in the short term to consolidate its market leading position.

Meta: Coping with Hardware Cost Pressure

Meta has raised its full year capital expenditure guidance for 2025 from $60 billion to $65 billion to $64 billion to $72 billion, primarily for data center expansion and AI computing power upgrades. CFO Susan Li admitted that the increase in hardware costs and tariff policies are the main driving forces. Although Meta is the first cloud company to publicly discuss the impact of tariffs, its competitors Alphabet and Amazon have not directly responded to related questions. Meta’s capital expenditure in the first quarter has exceeded expectations, and it plans to further accelerate the deployment of AI infrastructure in the future to support its AI transformation in social platforms and advertising businesses.

Amazon: AWS continues to lead the way

Amazon’s first quarter capital expenditures were not explicitly disclosed, but AWS business revenue increased by 17% year-on-year, reaching $29.3 billion. The company expects capital expenditures to remain high in the second quarter of 2025 to cope with the surge in AI workloads and potential tariff risks. CEO Andy Jassy stated that AWS is expected to become a multi trillion dollar business, with its AI capabilities expansion (such as Alexa Plus and generative AI tools) being the core of growth. Despite a slight decline in Amazon’s stock price after its financial report, the market’s confidence in its long-term AI investment has not diminished.

Industry Trends and Challenges

The sharp increase in capital expenditures of the four companies reflects the fierce competition in the AI and cloud computing markets. Google, Microsoft, and Meta all see AI as their core strategy for the next decade, while Amazon consolidates its leading position in cloud services through AWS. However, tariff policies, supply chain uncertainty, and global economic fluctuations may put pressure on short-term profitability. Analysts point out that despite the risks, companies’ long-term investment willingness in AI has not decreased, and capital expenditures will become one of the key factors determining the industry landscape.