AI Infrastructure Spending Soars

Major technology firms are investing heavily in AI infrastructure projects. Meta is spending $72 billion, and Google is increasing capital expenditure to $85 billion in 2025. Microsoft is investing $80 billion in AI this year. OpenAI has announced the $500 billion Stargate project and is collaborating with Oracle on a $300 billion deal, adding 4.5 gigawatts of AI data centre capacity. These investments aim to meet the growing demand for AI computing power.

This surge in data centre construction faces challenges, including high environmental costs and sustainability concerns. Experts suggest focusing on algorithms that build internal understandings of how the world works to achieve smarter and more sustainable AI. There are also concerns about ensuring AI infrastructure benefits everyone and doesn't deepen existing divides.

To finance infrastructure buildouts, companies are raising significant debt. CoreWeave has raised $29 billion, priced into multi-year contracts with companies like Meta, Microsoft and OpenAI. However, some analysts are concerned about potential data centre overcapacity if AI compute demand slows.