Google, Amazon, Meta, Microsoft will spend more on AI in 2026 than India will spend on the entire country
We don’t know yet whether there is a boom or recession in AI. But what has become clear is that tech companies are completely working on AI. Only four of them – Google, Meta, Amazon and Microsoft – are set to spend about $650 billion on AI in 2026. This is almost as much as the Indian government will spend on the entire country this year!
A few days ago, the Government of India presented its annual budget for the financial year 2026-27. The central government has estimated its total expenditure for the entire country at approximately $670 billion. Fast forward a few days and there’s a surprising figure floating around in the tech world. According to Bloomberg this figure is 650 billion dollars. This is the money that a handful of tech companies are expected to spend on the development of AI and related infrastructure in 2026. Four tech companies, Amazon, Google, Meta and Microsoft, are expected to spend almost as much on AI as our central government will spend on the entire country.
And these are planned figures. The likelihood is that, as we have seen over the past few years, tech companies will spend more than they budgeted. However on that note, we can also say that India – as is usually the case – may be spending a little more than its budget.
Yet the 2026 capital expenditure figures for AI and related infrastructure are surprisingly large. As soon as tech companies have announced their financial results, they have also indicated their upcoming expenses. Google had said a few days ago that its expenditure for 2026 will be around $185 billion. A few days later, Amazon revealed its own figure – $200 billion. Meta had pegged its spend at around $135 billion a few weeks ago, while industry buzz is that the figure for Microsoft is expected to be around $120 billion.
A large amount of this money is aimed at building AI infrastructure, including massive data centers, high-end servers, networking equipment, and specialized chips that provide everything from chatbots and image generators to enterprise AI tools.
Amazon, Meta, Google and Microsoft will spend billions
So far, it looks like Amazon is expected to spend the most. The company has told investors that its capital spending could reach nearly $200 billion in 2026, largely due to growing demand for AI capabilities on its AWS cloud platform. Alphabet is also not behind. Google’s parent company has indicated that its spending could range between $175 billion and $185 billion, with AI and cloud infrastructure at the core of its plans.
Microsoft and Meta are also investing large sums of money to secure computing power for their AI ambitions. Meta said it expects capital spending of $115 billion to $135 billion in 2026. Meanwhile, Microsoft has already shown how quickly its investment is paying off. Last week, the company reported a 66 percent increase in capital expenditure for the second quarter, outperforming market expectations. Analysts now estimate Microsoft’s total capital spending for the fiscal year ending in June could reach $120 billion.
AI spending scale
Although tech companies have been spending more and more in the last few years, this year the figures are becoming much higher. They are so big, as mentioned earlier, that the spending of only four big tech companies is going to equal or exceed the spending of the Indian government. And the Indian government has to spend money on 10000 things including defence, food subsidies, pensions, health care, education, infrastructure, technology and welfare programs for its population of about 1.5 billion people.
AI spending by tech companies in 2026 represents the entire GDP of tens of thousands of countries, including developed countries like Sweden, whose GDP in 2025 was about $620 billion.
The reason behind this AI spending seems to be the perception that the tech industry is now in its final stages. The idea is that whoever wins the AI’s game wins the game forever. This is clearly reflected in Amazon CEO Andy Jassy’s statement on February 6. “I strongly believe that every customer experience we know today is going to be reinvented with AI. So we’re going to invest aggressively here, and we’re going to invest to become a leader in this area,” he said while announcing Amazon’s latest financial results.
Spending isn’t good news for tech workers
Coincidentally, Amazon is planning capital spending of $200 billion for 2026, just days after laying off nearly 16,000 employees. In fact, it has laid off about 30,000 employees since October. So, if the company is willing to spend money on AI, why is it laying off employees?
This is the dichotomy at the heart of AI-led technological advances. As the tech industry continues to reinvent itself around AI, news of tech companies spending huge sums of money should make tech workers cautious, 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 try to save money on human resources by cutting the number of employees.
When tech companies have made layoffs in recent months, they have not explicitly said that curbing headcount was a result of cost-cutting so that more money could be spent on AI infrastructure. But it is implicit. When Microsoft laid off 9,000 employees last year, he told the BBC: “We will continue to implement the organizational changes needed to best position the company for success in a dynamic marketplace.”
Similarly, when Amazon recently released 16K, the company highlighted that it will still continue to invest in strategic areas – also known as AI. “While we are making these changes, we will also continue to recruit and invest in strategic areas and functions that are important to our future,” the company said in its blog.
It’s the same story with other tech companies. For example, Meta has recently curated its work in the metaverse and virtual reality. It laid off 10 percent of Reality Labs’ staff while it pushes everything forward with AI. In other words, as tech companies ramp up spending on AI infrastructure in the coming months, there’s always the possibility that staffing may take second priority to GPUs and servers.
