Big Tech has been able to soothe investors’ fears about its high spending on artificial intelligence, partly by announcing quarterly results that beat expectations and showcasing the fruits of those AI investments. Alphabet, Meta, and Microsoft were among the biggest winners, adding more than $350 billion in market value after reporting double-digit growth in revenue and net income. Microsoft surged past $4 trillion in market cap, becoming the second company to reach that milestone after Nvidia . Meta’s shares rose 11%, pushing its valuation close to $2 trillion. The tech firms’ robust performances were largely driven by growth in Google and Microsoft’s cloud computing divisions and improved advertising margins at Meta. These results were used to justify yet another round of heavy investment in AI infrastructure. Together with Amazon, the trio is on track to spend more than $350 billion this year on data centers and other AI-related infrastructure, with forecasts suggesting that figure could exceed $400 billion by 2026. Microsoft and Meta lead in AI infrastructure race Microsoft CEO Satya Nadella announced plans to invest $120 billion over the next year to scale up data center capacity faster than any competitor. Meanwhile, Meta is preparing to spend $105 billion next year as it begins building a new data center in Louisiana—dubbed Hyperion—that will span an area the size of Manhattan. Mark Zuckerberg is also reportedly offering engineers pay packages in the hundreds of millions of dollars to join his new “superintelligence” AI lab. In previous quarters, investors reacted nervously to the sheer scale of spending, worried that the returns wouldn’t materialize. This time, however, sentiment appears to have shifted. Investors have taken the increased capital expenditure in stride, encouraged by signs of strong demand for AI computing power and a growing backlog of customer orders. Still, some voices in the market remain cautious. Drew Dickson, founder of Albert Bridge Capital, warned that the current wave of AI optimism may enter a “fervor stage,” where investors are so excited that they ignore the risks. “Not everyone can win, and spending on AI is not necessarily a panacea,” he said. Regulatory storm clouds gather over Big Tech despite investor optimism Amazon was the outlier in this quarter’s earnings season. Despite beating financial estimates, its stock fell 7% as investors expressed concern over lackluster performance at Amazon Web Services, the company’s cloud division. AWS’s growth trailed behind that of Microsoft Azure and Google Cloud. According to Jefferies, Amazon spent $31.4 billion in capital expenditures during the second quarter alone and is expected to hit $106 billion in total capex for the year. On the other hand, Apple surprised the market with a 10% jump in revenue, partly thanks to steady iPhone sales. Executives pledged to ramp up AI spending after facing criticism for lagging behind peers in AI integration. However, the company’s shares saw little movement, as concerns remain over Apple’s exposure to new US tariffs targeting China, Taiwan, and India—key regions in its supply chain. While investors currently appear optimistic , serious regulatory risks loom. Antitrust regulators in the US, EU, and UK are ramping up legal action that could reshape or even break up some of the world’s largest tech companies. The Federal Trade Commission is pushing Meta to divest WhatsApp and Instagram in the US. Microsoft’s cloud business is under scrutiny on both sides of the Atlantic. Amazon faces an FTC lawsuit over alleged price manipulation, while Apple is battling a Department of Justice case accusing it of creating an impenetrable ecosystem around the iPhone. Alphabet faces perhaps the most significant challenges, having lost three antitrust cases related to its search engine, ad business, and app store. Regulators may soon force Google to sell its Chrome browser and open up its search index to rivals. Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.