This analysis is by Bloomberg Intelligence Senior Industry Analyst Anurag Rana and Bloomberg Intelligence Senior Associate Analyst Andrew Girard. It appeared first on the Bloomberg Terminal.

Microsoft, Amazon Web Services, Google and other big tech companies could collectively amp up capital spending to about $200 billion in 2025, representing a two-year gain that's triple the 2020-23 average as generative-AI demand spurs outlays on data centers and new products, our analysis shows. It may take 2-3 years to see the financial benefit, which we anticipate will come in the form of higher cloud utilization, copilots and large language model licensing.

Incremental capex of $90 billion above 2023

Our analysis of the top tech companies shows over $90 billion in incremental capital spending in 2024-25 vs. 2023, dedicated mostly to expanding generative-AI infrastructure. This group, which includes Amazon Web Services, Microsoft, Google, Oracle, Meta and Apple, added an average of $14 billion annually to capex from 2020-23. The $90 billion increase over a two-year period illustrates the increased demand and interest by clients, and appears different than other hyped technologies, such as the metaverse.