Mega AI Projects Devour Rp 10,000 Trillion, Investors Demand Results
Massive spending on artificial intelligence (AI) development by the world’s tech giants is now being questioned by investors. After three years of pouring hundreds of billions of dollars into the technology, the market is demanding certainty on whether these enormous investments will truly generate profits.
The quarterly financial reports of Alphabet, Microsoft, Meta, and Amazon, released on Wednesday US time, represent a crucial moment. The results will indicate whether the substantial AI expenditures can drive growth in cloud business and digital advertising to justify the costs incurred.
These four companies are estimated to spend around US$600 billion, or more than Rp 10,000 trillion, on AI development this year.
This historic spending is squeezing cash flows and testing the patience of Wall Street investors, although share prices remain resilient due to expectations of long-term gains.
The impacts of this AI splurge are beginning to show. Amazon and Meta, the parent of Instagram, have announced layoffs affecting thousands of employees. Microsoft has even launched its first employee buyout programme in over 50 years.
“What investors, including us, are looking for is the return on all this capital expenditure (capex),” said Joe Maginot, portfolio manager for large-cap equities at Madison Investments, quoted from Reuters on Wednesday (29/4/2026).
“Clearly, this will take time, but this is a business that previously generated substantial free cash flow, and today almost all operating cash flow is absorbed by capex. So, the business economics are changing,” he added.
This shift is reflected in the cloud business, which is the backbone of AI monetisation. For the January-March quarter, growth is expected to increase modestly: Amazon Web Services at 25%, Microsoft Azure at 40%, and Google Cloud at 50.1%.
Overall, revenue for the major tech companies remains solid. Alphabet’s sales are projected to rise 18.7% to US$107.06 billion. Amazon is forecast to grow 13.9% to US$177.30 billion, while Microsoft is expected to increase 16.2% to US$81.39 billion.
Meta is anticipated to record the largest revenue surge, at 31% to US$55.45 billion. This fastest growth in over four years is driven by improvements in AI-based advertising effectiveness and the company’s position in the digital market.
The main spotlight is on Microsoft. The company’s shares have lagged behind competitors and recorded its worst quarterly performance since the 2008 financial crisis.
Investors are also beginning to doubt Microsoft’s ability to monetise Copilot. From more than 450 million enterprise customers, only 3.3% subscribe to the AI assistant at US$30 per month.
At the same time, AI models from Microsoft’s partners like Anthropic could replace traditional software that has long been the company’s main revenue source. Microsoft is attempting to turn this threat into an opportunity by integrating rival AI models into its ecosystem.
Meanwhile, Microsoft’s partnership with OpenAI is no longer exclusive. Although the company will receive 20% of OpenAI’s revenue until 2030, OpenAI is now free to collaborate with competing cloud providers like Amazon.
“Companies must explain why their business models will not be significantly disrupted by AI and why their investments and relationships with OpenAI will keep them competitive,” said Melissa Otto, head of research at S&P Global Visible Alpha.
“Nadella must answer that,” she added.