big number
$220 billion. That’s the highest capital spending projection among “Magnificent Seven” companies, with Amazon taking the top spot ahead of Alphabet ($205 billion) and Microsoft ($175 billion). Amazon, Alphabet, Microsoft and Meta combine for $738 billion in projected spending this fiscal year.
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what to watch for
How companies escalate plans to build more AI infrastructure. Nvidia and OpenAI have reportedly discussed a data center near Columbus, Ohio, that could cost more than $500 billion, with OpenAI discussing a chip purchase valued up to $350 billion. The project could become the largest such project by power capacity in the world by far: A proposed 10-gigawatt site would dwarf the power output of other planned projects, including a $20 billion, 3.2-gigawatt center in Effingham County, Georgia, announced by OpenAI in July.
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key background
AI infrastructure has increasingly become a larger source of corporate borrowing, as mega-cap tech firms and data center operators raise billions of dollars to back new projects. Traditional bond markets have limitations on how much debt they can absorb, however, largely because investors can only take on so much exposure to the same companies or industry. Private lenders face fewer restrictions and can instead make loans backed by assets or revenue, such as data centers or their future income.
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further reading
ForbesNvidia Stock Loses $130 Billion In Market Value As Firm Reportedly Enters $500 Billion AI Financing DealBy Antonio Pequeño IV