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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SEOUL, November 6 (local time) — Major global technology firms are gearing up for a record-breaking investment surge in artificial intelligence (AI) infrastructure, pledging up to US$500 billion (approximately KRW 720 trillion) annually. At the same time, financial institutions are cautioning that returns on these capital expenditures (ROI) may be slow to materialise, and only a subset of players may ultimately succeed.
According to recent earnings disclosures, Meta Platforms CEO Mark Zuckerberg announced on 29 October that the company had raised its 2025 capital-expenditure guidance to US$70-72 billion, and indicated that 2026 will see even larger increases.
Alphabet Inc. (Google’s parent) similarly raised its 2025 capex estimate to about US$91-93 billion, emphasising expansion of AI computing infrastructure.
Microsoft Corporation reported Year-on-Year Q1 capex of US$34.9 billion (a 74 % increase) and signalled annual spending above US$120 billion.
Industry analysts and financial commentators note that while the ambition is enormous, returns are not guaranteed—especially in the near term:
Research from the Financial Times highlights that these firms’ AI-infrastructure investments are already “eating into hyperscalers’ cash flows,” with the capex-to-operating-cash‐flow ratio hitting record proportions.
Some commentators estimate that even if hundreds of billions are invested, the pressure on profitability, depreciation costs, and hardware refresh cycles will challenge business models.
The unprecedented scale of investment signals that AI has moved from incremental to strategic infrastructure phase for big tech.
However, investors and stakeholders will be closely watching which companies can convert their capex into sustained revenue growth and margin improvement.
Firms that demonstrate disciplined investment, close alignment between infrastructure build-out and revenue contracts, and avoidance of speculative build-outs may have an advantage.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
