Microsoft Keeps AI Capex Unchanged at $190B — First Hyperscaler to Hold the Line

On Wednesday, Microsoft kept its AI capex forecast unchanged at $190B for the calendar year (adjusted to $175B due to an accounting change), making it the first major hyperscaler to hold the line on spending. The stock jumped 8% on the news.

Context: The Industry's Spending Spree

Google, Amazon, Microsoft, and Meta had already planned to spend over $700B this year on AI data centers. Most competitors are still increasing their forecasts:

• Alphabet increased capex by $15B (stock fell sharply).
• Tesla bumped up its projection (stock fell).
• Meta narrowed its range, raising the midpoint by $2.5B.

What's Driving Costs?

Soaring memory chip prices are a major factor. Memory is a large component of data center costs, and higher prices have made it more expensive to build AI capacity. One research finding: higher memory prices explain about 45% of the growth in cloud companies' capex this year.

Microsoft's decision to keep spending flat may imply it's actually pulling back on building new capacity, since rising costs would otherwise push the dollar figure higher. For developers, this could signal a stabilization in AI compute supply — or at least a pause in the relentless expansion.