AWS: $100B+ AI Investment

"The vast majority of that CapEx spend is on AI for AWS."

Why Such Massive Investment?

AWS has seen this play out before: Lower prices  More adoption.

When asked about cheaper AI models like DeepSeek, Jassy drew a powerful parallel to early cloud adoption:

"When we launched AWS in 2006... people thought companies would spend a lot less on infrastructure. What happens is companies spend a lot less per unit... but then they get excited about what else they could build that they always thought was cost-prohibitive before, and they usually end up spending a lot more in total."

AWS expects the same pattern to emerge in AI:

"The cost of inference will substantially come down... making it much easier for companies to infuse all their applications with inference and generative AI."

AI is set to become a core building block of software developmentas fundamental as compute, storage, and databases.

To enable this, AWS is pushing:

• Trainium2 AI chips, offering 30-40% better price-performance than current GPU-based instances.

• Project Rainier, a collaboration with Anthropic, using hundreds of thousands of Trainium2 chips to build the worlds largest AI compute cluster.

• Amazon Bedrock Marketplace, featuring 100+ top AI models for customers to choose from.

Microsoft: Confirming $80B AI CapEx for the Year

The market has been eagerly awaiting Satya Nadellas confirmation on whether Microsoft would hit its $80B AI CapEx target for this fiscal year.

Microsoft has already increased CapEx by 13% QoQ, from $20B in Q1 to $22.6B in Q2, spending $42.6B of the planned $80B in just the first half of the fiscal year.

For the next two quarters, Microsoft expects CapEx to remain at Q2 levels, effectively confirming the $80B annual spend despite concerns around DeepSeek and competitive AI pricing.

Google Cloud: AI Investment Surges nearly 50% to $75B in 2025

In response to high demand (and increasing competition?), Google is boosting its AI infrastructure investment to $75B in 2025, up from ~$52B in 2024.

This capital will primarily fund AI-ready servers and data centers, reflecting Google's confidence in sustained cloud demand.

Google continues to advance its custom silicon strategy.

In Q4, there was strong adoption of Trillium, Googles sixth-generation TPU. Sundar Pichai highlighted:

"Trillium delivers 4x better training performance and 3x greater inference throughput compared to the previous generation."

This technological edge is a key differentiator for Google Clouds AI offerings.

The Bigger Picture

Despite their massive scale, cloud growth remains strong. With hyperscalers planning to invest $255B+ in AI infrastructure in 2025, this trend is set to continue.

This raises a key question for leaders: If AI is becoming as fundamental as cloud and compute, how are you rethinking your product, GTM, and partnership strategy?

Marketplace Transactions Reach Billions

Google Cloud CEO Sundar Pichai highlighted the growing role of partners and cloud marketplace, stating:

"Customers are purchasing billions of dollars of solutions through our Cloud Marketplace."

Google Clouds enterprise momentum is accelerating, with strategic deals reaching new highs and partners playing an increasingly critical role in large enterprise wins:

• $250M+ deals have doubled year-over-year

• Several $1B+ customer deals closed in 2024

These numbers underscore the massive customer shift to cloud and AIand their increasing reliance on cloud marketplaces for enterprise adoption.

Given AWS and Azure's larger market share, its safe to assume their marketplace scale is even greater.

What This Means for Tech Leaders

The record-breaking $255B+ infrastructure investment in 2025 signals hyperscalers aggressive expansiondriving cloud, AI, and marketplace growth at an unprecedented pace.

This rapid evolution will:

• Accelerate AI-driven applications and cloud infrastructure growth

• Further establish cloud marketplaces as a dominant distribution channel

How is your organization adapting its cloud marketplace strategy to capitalize on this shift?