Javier Pastor
Senior WriterComputer scientist turned tech journalist. I've written about almost everything related to technology, but I specialize in hardware, operating systems and cryptocurrencies. I like writing about tech so much that I do it both for Xataka and Incognitosis, my personal blog.
Big Tech is investing enormous sums of money in data centers, primarily to meet the massive demand for computing capacity for AI tasks. However, there’s one surprising exception to this trend.
Money, money, money. Several major tech companies have recently announced their investment plans for 2025 and revealed staggering budgets for constructing AI data centers. Microsoft plans to invest $80 billion; Google, $75 billion; and Meta, $65 billion. Amazon has gone even further, promising an investment of $100 billion in this area.
|
COMPANY |
2025 CAPEX |
MARKET CAP |
CAPEX TO MARKET CAP RATIO |
|
Amazon |
$100 billion |
$2.43 trillion |
4.12% |
|
Microsoft |
$80 billion |
$3.05 trillion |
2.63% |
|
|
$75 billion |
$2.27 trillion |
3.31% |
|
Meta |
$65 billion |
$1.80 trillion |
3.59% |
|
Apple |
$12 billion |
$3.42 trillion |
0.35% |
To provide some context, countries such as Bulgaria, Guatemala, and Cuba had a GDP of around $100 billion in 2023. The U.S.’s GDP was around $27.72 trillion.
Apple. In contrast, Apple’s situation is quite different. The company’s forecast for capital expenditure (CapEx) in 2025 is expected to remain almost flat compared to 2024, at around $12 billion. While this is still a significant figure, it pales in comparison to the investments of its competitors in the AI sector.
The largest company by market cap. Amazon stands out with a CapEx to market cap ratio of 4.12%, followed closely by Meta and Google. Microsoft is taking a more cautious approach, with a ratio of 2.63%. Surprisingly, Apple, the world’s largest company by market cap, has a CapEx that amounts to only 0.35% of its total value.
Wall Street rules. These companies appear to make decisions significantly influenced by the stock market. Interestingly, the presentation of financial results and short-term forecasts has created a contagious effect. The message seems to be that if Big Tech doesn’t invest heavily in data centers, shareholders will respond negatively.
Nvidia, the primary beneficiary. If the current trend continues, Nvidia is expected to receive a significant portion of these massive investments in data centers. There will certainly be other beneficiaries in this sector. However, Nvidia’s CapEx stands out as comparatively low. This is especially true when measured against its competitors and its current market cap of $3.18 trillion.
It's estimated that Nvidia’s CapEx will be around $3 billion in fiscal 2025, which is only a quarter of Apple’s. In 2024, Nvidia’s CapEx was just $1 billion.
Apple’s different approach to AI. The tech giant’s strategy diverges from its competitors in this area. Since the introduction of Apple Intelligence, Apple has offered very few new features, and its rollout has been slow. Internally, there’s a prevailing sentiment that the company is lagging behind others in the AI space, which is unlikely to change soon.
Image | Medhat Dawoud
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