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'Stratospheric' AI Spending By Four Wealthy Companies Reaches $360B Just For Data Centers (msn.com) 63

Posted by EditorDavid from the big-big-data dept.
"Maybe you've heard that artificial intelligence is a bubble poised to burst," writes a Washington Post technology columnist. "Maybe you have heard that it isn't. (No one really knows either way, but that won't stop the bros from jabbering about it constantly.)"

"But I can confidently tell you that the money being thrown around for AI is so huge that numbers have lost all meaning." The companies pouring money in are so rich and so power-hungry (in multiple meanings of that term) that our puny human brains cannot really comprehend. So let's try to give some meaning and context to the stratospheric numbers in AI. Is it a bubble? Eh, who knows. But it is completely bonkers. In just the past year, the four richest companies developing AI — Microsoft, Google, Amazon and Meta — have spent roughly $360 billion combined for big-ticket projects, which included building AI data centers and stuffing them with computer chips and equipment, according to my analysis of financial disclosures.... How do companies pay for the enormous sums they are lavishing on AI? Mostly, these companies make so much money that they can afford to go bananas...

Eight of the world's top 10 most valuable companies are AI-centric or AI-ish American corporate giants — Nvidia, Apple, Microsoft, Google, Amazon, Broadcom, Meta and Tesla. That's according to tallies from S&P Global Market Intelligence based on the total price of the companies' stock held by investors. My analysis of the S&P data shows that the collective worth of those eight giants, $23 trillion, is more than the value of the next 96 most valuable U.S. companies put together, which includes many still very rich names such as JPMorgan, Walmart, Visa and ExxonMobil. No. 1 on that list, the AI computer chip seller Nvidia, last week become the first company in history to reach a stock market value of $5 trillion. That alone was more than the value of entire stock markets in most countries, Bloomberg News reported, other than the five biggest (in the U.S., China, Japan, Hong Kong and India)...

All the announced or under-construction data centers for powering AI would consume roughly as much electricity as 44 million households in the United States if they run full tilt, according to a recent analysis by the Barclays investment bank as reported by the Financial Times. For context, that's nearly one-third of the total number of residential housing units in the entire country, according to U.S. Census Bureau housing estimates for 2024.
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'Stratospheric' AI Spending By Four Wealthy Companies Reaches $360B Just For Data Centers More

'Stratospheric' AI Spending By Four Wealthy Companies Reaches $360B Just For Data Centers

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  • Meanwhile... (Score:5, Insightful)

    by rsilvergun ( 571051 ) on Saturday November 08, 2025 @11:24AM (#65782472)
    You're going to do a 60 minute commute one way and you're just now noticing the bridge you're stuck under is crumbling because we haven't built infrastructure in 30 years.

    It's almost as if giving all of our money to the rich because we were busy being distracted by moral panics was a bad idea.

    The funny thing is when I say moral panic everybody agrees with me but if I mention the specific moral panics that caused you to give all your money to the rich then everybody gets upset.

    • Do the bottom 90% even have enough money that the rich want it, or can they make ten times tbat amount just by investing in the fictitious goods of stock markets, while we get a basic income to satisfy our basic physical needs?

      • Re: Meanwhile... (Score:5, Insightful)

        by jacks smirking reven ( 909048 ) on Saturday November 08, 2025 @12:14PM (#65782574)

        Do the bottom 90% even have enough money that the rich want it

        If that's true or not doesn't really matter because all their actions show that whatever that amount is they want it.

        • whatever that amount is they want it.

          I don't see much evidence of that. I think they are fighting over the other 90%. Henry Ford made cars and needed consumers to buy them. NVIDIA makes chips and needs AI to buy them.

          • Well that's sortof a different and possibly worse problem unto itself

            • possibly worse problem unto itself

              Well yes. Because its showing that if you don't need people to produce goods you don't need people to consume them either. And sociopaths who don't care rule the world. Or at least their inventions do.

      • Do the bottom 90% even have enough money that the rich want it, or can they make ten times tbat amount just by investing in the fictitious goods of stock markets, while we get a basic income to satisfy our basic physical needs?

        The rich don't get their money from the poor. They get their money from the ether, from price appreciation of their existing assets. How the poor support the rich is in their acceptance of the price appreciation. If only the rich engaged in the stock markets, then they would essentially just exchange money with each other. However, the poor also participate in the stock market, and that participation provides a connection for the rich to parlay inflated stock prices into tangible items and services.

      • Re: (Score:2, Insightful)

        by gweihir ( 88907 )

        The rich do not want more money. They want the poor to have _less_ money and especially less freedom, ideally no freedom at all. All of them have enough money that a bit more really does not matter. This is about oppression and, eventually, eradication or enslavement of large parts of the population so that they can feel superior. At least I do not see any other explanation that is left.

        These are people with really bad personality defects and we unwisely gave them power. I mean, just look at how incapable a

      • They want to dismantle capitalism and installed themselves as feudal Lords.

        They are sick and tired of being dependent on consumers and employees. So they want to automate basically everything so they can eliminate virtually all employees and then keep a handful of people around to keep the machines going and then a handful of thugs to keep the engineers in line. Maybe mix in a little bit of religious zealotry and extremism. Set themselves up as gods like the emperor of Japan did maybe or the Pharaohs.
  • I don't think you'll be able to add an additional 33% of the USA's usage of power over a couple years and think that it won't end badly. And renewable power like solar would require massive grid storage since this stuff is running 24x7.

    This will pop simply because the resources just aren't there, without even taking into account all of LLM's bullshit hallucinations and shit data output.

    • That Ion QC story earlier shows promise in helping with that problem.

      • That Ion QC story earlier shows promise in helping with that problem.

        Data Centers being built right now are not going to benefit from a tech that could still be 20+ years away from mass production. Even if those new computers were available right now, they won't be just a snap-in for these data centers, which are being built specifically around GPU architectures and GPU cooling. Data centers being constructed and used right would probably need to be all but razed to accommodate an entirely new paradigm for computing.

    • If you look at a Sankey diagram of US energy production and consumption, will you too see that residential electricity usage is less than 15% of total electricity demand? So does data center usage only represent a 5% increase in demand, which given the 10% electricity generation surplus shown on eia.gov's energy facts explained page, is totally doable given current production?

      https://flowcharts.llnl.gov/si... [llnl.gov]

      https://www.eia.gov/energyexpl... [eia.gov]

      So is this panic over electricity supply wildly overblown, a pure h

      • America has an aging infrastructure problem made worse by increasing demands (not just AI) and climate change effects. Eventually something has to be done about it or it'll fail at the worst times. All that costs money.

      • If you look at a Sankey diagram of US energy production and consumption, will you too see that residential electricity usage is less than 15% of total electricity demand?

        So is this panic over electricity supply wildly overblown, a pure hallucination meant to push emotional scarcity buttons in you so utility commissions can administer higher rates and the public will go along meekly?

        Current US data center electricity usage is around 4% of total usage. That sounds like a low percentage, but the concern is over the anticipated growth of that percentage. But you are right that even with the wildest projections, data center usage will still remain relatively low.

      • Re: (Score:2)

        by kackle ( 910159 )
        Plus some will use millions of gallons of water per day from their locale.

  • It's all based on the assumption that... (Score:3)

    by MpVpRb ( 1423381 ) on Saturday November 08, 2025 @11:54AM (#65782534)

    ...progress can only be made by using massive and ever increasing computing power
    One efficient algorithm could change everything

    • Re: (Score:2)

      by HiThere ( 15173 )

      It's going to take more than one more efficient algorithm. OTOH, there've already been improvements in more than one algorithm. Nobody knows how far that could go, but the best evidence is that it could get a LOT more efficient. (Consider the power usage of a human brain...it uses a lot of power for an organ, but not really all that much.)

    • Re: (Score:2)

      by gweihir ( 88907 )

      That "efficient algorithm" may never materialize or may not materialize soon. Remember that AI has been an intense research topic for at least half a century. There are no easy to do things left, they have all been tried and most failed.

      That said, we _know_ more computing power will not help. Lack of computing power is not what makes LLMs so bad. Those data-centers have no chance to ever be profitable. More likely, they will be a total write-off and maybe some not-so-pretty ruins.

  • When AI bubble explodes... (Score:4, Insightful)

    by LordHighExecutioner ( 4245243 ) on Saturday November 08, 2025 @12:38PM (#65782594)
    ...Ebay will be filled with tons of useless hardware. The shutdown of most infrastructures will probably bring electricity for free to people, just like it happens here [newscientist.com].

  • "In just the past year, the four richest companies developing AI — Microsoft, Google, Amazon and Meta — have spent roughly $360 billion combined for big-ticket projects, which included building AI data centers and stuffing them with computer chips and equipment, according to my analysis of financial disclosures.... How do companies pay for the enormous sums they are lavishing on AI?"

    Amazon, Microsoft, and Google are cloud providers. It's not clear how much of their data center expansion is for

  • Eventually (Score:5, Informative)

    by stabiesoft ( 733417 ) on Saturday November 08, 2025 @01:21PM (#65782660) Homepage
    All that capex needs someone(biz or people) to buy the product. If not, it will be an absolute massive writeoff. Massive Some things that you do capex on has relatively long lives and you can wait a bit to recoup. Computers not so much. The IRS depreciation schedule for computers is 5 years. The IRS is no generous org, so you can bet in 5 years the entire amount spent on computers is worth basically zip. The buildings(39 year schedule) are worth more, assuming they don't need major renovations for the next thing you drop in the bldg. So if within the next 5 years revenue doesn't exceed the mass expenditures, expect some troubles.

  • He said the four top companies were "AI centric".
    Microsoft, Google, Amazon, and Meta

    These are NOT AI companies. Their business is not currently funded by AI, nor is it their main focus. They ARE very rich computing companies that think AI is going to become their business, so they heavily invest in it $360 billion.

    That is NOT a big investment for those four companies - they are worth more than 9 trillion total. Spending about 10% of their value is significant, but not amazing.

    The issue is that humans are

    • Re: (Score:2)

      by HiThere ( 15173 )

      In addition, the part of that money spent on computer centers will be useful even if AI doesn't pan out. It's not like investing in tulip bulbs. If AI doesn't pan out, it will just take a few years longer to pay for itself.

      That said, AI will pan out. Even if there's no further development (HAH!) the current AIs will find an immense number of uses. It may well be "growing too fast", but that's not the same as worthless. (But expect well over half of the AI projects that are adopted in the next few years

  • I think they may even reach that at least for this decade. I mean, a known-defective and unfixable technology that costs far too much to run and maintain and has not made good on any of its promises and that has essentially (besides some cosmetics) stagnated? And then you pour in enough money to bring the economy down if anything goes wrong?

    Sheer madness. Well, I hope this crash will defer the next AI hype (and there will be one as stupid people do not go away) by a few decades. Then this craze would at lea

  • ... big techs obscene cash reserves and not so much third-party or VC investment money, so I'm not too concerned for the market, to be honest. The environment and the looming AI threat is a different issue, but's that's not so much about the market. If the bubble pops I hope for little impact for ordinary folks.

  • The OP never answers the question as to how the investments in AI will pay out. No current monetization model can get to break even much less profit. So, eventually investors are going to figure out the "pass the cash" scheme and that AGI isn't going to happen with the current approach, i.e. LLMs. But along with this mega bubble is the real estate bubble, debt bubble (aka bonds), and other stocks are also grossly overvalued. If any of these bubbles pop, then I don't see nay stop gap to keep them for all p
  • These are monopolies with so much concentrated computer power that they can only compete with one another. They need to be broken up.

  • The pop from this bubble is going to destroy the world or perhaps the efforts to stop the bubble from popping (and thus avoid the destruction of the world) will destroy the world.

    It's too-big-to-fail as a core business strategy.

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