A few days ago, the Indian government presented its annual budget for the financial year 2026-27. The central government pegged its total expenditure for the entire country at around $670 billion. Fast forward a few days and there is an astounding figure floating around in the tech world. The figure is $650 billion, according to Bloomberg. It is the money that just a handful of tech companies are expected to spend on developing AI and related infrastructure in 2026. Four tech companies, which are Amazon, Google, Meta and Microsoft, are expected to spend nearly as much on AI as our central government will spend on the entire country.
And these are planned figures. Chances are that, just the way we have seen in the last few years, the tech companies will end up spending more than what they have budgeted. Though on that note, we can also say that India might — as it usually happens — end up spending a little more than it has budgeted.
Still the 2026 capex figures for AI and related infrastructure are mind bogglingly big. As the tech companies have declared their financial results, they have also indicated their upcoming expenses. Google a few days ago said that its expenditure for 2026 would be around $185 billion. A few days later, Amazon revealed its own figure — $200 billion. Meta had a few weeks ago pegged its expenditure at around $135 billion, whereas industry buzz is that the figure for Microsoft is expected to be around $120 billion.
A large amount of this money is aimed squarely at creating AI infrastructure, including massive data centres, high-end servers, networking equipment and specialised chips that power everything from chatbots and image generators to enterprise AI tools.
Amazon, Meta, Google, and Microsoft to spend billions
So far, it seems that Amazon is expected to be the biggest spender. The company has told investors that its capital expenditure could reach around $200 billion in 2026, driven mainly by rising demand for AI capacity on its AWS cloud platform. Alphabet is not far behind. Google’s parent has indicated that its spending could climb to between $175 billion and $185 billion, with AI and cloud infrastructure sitting at the core of its plans.
Microsoft and Meta are also committing vast sums to secure computing power for their AI ambitions. Meta has said it expects capital spending of $115 billion to $135 billion in 2026. Microsoft, meanwhile, has already shown how quickly its investment is rising. Last week, the company reported a 66 per cent jump in capital expenditure for the second quarter, beating market expectations. Analysts now estimate Microsoft’s total capex could approach $120 billion for the fiscal year ending in June.
The scale of AI spending
Although tech companies are spending more and more in the last few years, this year the figures are getting astronomical. They are so big, as noted earlier, that only the spending by four big tech companies is going to be as much or more than the spending of the Indian government. And the Indian government has to spend money on 10000 things, including defence, food subsidies, pensions, healthcare, education, infrastructure, technology and welfare programmes, for a population of nearly 1.5 billion people.
The AI expenditure from tech companies in 2026 mirrors the entire GDP of tens of countries, including countries as developed as Sweden, which had a GDP of around $620 billion in 2025.
The reason behind this AI spending seems to be the assumption that the tech industry is now in the end game. The idea is that whoever wins the game of AI wins the game forever. This reflects aptly in Amazon CEO Andy Jassy’s statement on February 6. “I passionately believe that every customer experience that we know of today is going to be reinvented with AI. So we’re going to invest aggressively here, and we’re going to invest to be the leader in this space,” he noted as Amazon announced its latest financial results.
Spending not a good news for tech employees
Incidentally, Amazon is committing $200 billion capex for 2026 just days after firing around 16000 employees. In fact it has fired around 30,000 employees since October. So, if the company is willing to spend money on AI, why is it firing employees?
That is the dichotomy at the heart of the AI-led tech growth. As the tech industry reinvents itself around AI, the news of tech companies spending big money should make tech employees cautious and not optimistic.
Money is not infinite and there is a fear that as Google, Meta, Amazon, Microsoft and others increase their spending on AI infrastructure, they will look to save money on human resources by slashing the number of employees.
In recent months when tech companies have carried out layoffs, they haven’t explicitly said that curbing headcount is a result of cutting costs so that more money can be spent on Ai infrastructure. But it has been implied. Last year when Microsoft let go of 9000 employees, it told the BBC: “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
In the same manner, recently when Amazon let go of 16000, the company highlighted that it would still continue to invest in what it believes are strategic areas — aka AI. “While we’re making these changes, we’ll also continue hiring and investing in strategic areas and functions that are critical to our future,” the company noted in its blog.
The story is the same with other tech companies. Meta, for example, recently curbed its work in metaverse and virtual reality. It fired 10 per cent of Reality Lab staff even as it pushes ahead with everything AI. In other words, in coming months as tech companies ramp up expenditure of AI infrastructure, there is always a possibility that employees may get a second priority compared to GPUs and servers.
