According to an in-depth analysis of the latest AI trend report released by the "Internet Queen," the world's largest technology companies are investing in artificial intelligence (AI) research and capital expenditures at an unprecedented scale and speed. The report points out that over the past two decades, capital expenditures in the tech industry have been on a continuous upward trend, initially for storing and accessing data, then for distribution and scaling, and now primarily focused on computing and intelligence.
This AI trend report emphasizes that by 2023, AI has evolved from a research function into an important capital expenditure project. The combined capital expenditures of six major U.S. tech giants (Apple, Nvidia, Microsoft, Alphabet, Amazon (only AWS), and Meta Platforms) accelerated by 63% between 2023 and 2024, totaling $212 billion. These companies invest hundreds of billions of dollars annually not only for collecting data but also for real-time training, reasoning, and monetizing data. The report shows that their capital expenditures as a proportion of total revenue rose from 8% in 2014 to 15% in 2024.
The report also notes that these tech giants have significantly increased their R&D spending. Data shows that the annual growth rate of R&D spending for these six companies was 20% between 2014 and 2024, with the proportion of total revenue increasing from 9% a decade ago to 13% currently. This reflects their strategic investment in AI aimed at driving growth and defending against emerging competitors. For example, Microsoft's AI product revenue increased by 175% to $13 billion between 2023 and 2024.
The report particularly mentions that these tech giants possess substantial free cash flow and cash reserves, enabling them to make large-scale AI investments. Over the past decade, their free cash flow grew by 263%, reaching $389 billion; cash reserves increased by 103%, reaching $443 billion. Nvidia's data center revenue rapidly increased between 2022 and 2024, with its share of global data center capital expenditures rising from less than 10% to 25%.
The report concludes that this massive wave of investment is driving the development of AI technology at an unprecedented pace and reshaping the entire technological ecosystem and global competitive landscape. Despite questions about profitability and business models brought by high-level investments, the report believes that "an unusual combination of competition, capital, and entrepreneurship will rapidly advance AI."
