Big Tech Spends Even Bigger; Google’s AI Enterprise Returns Swell; Anthropic Edging Towards A Trillion; And Meta Is Once Again Punished By Investors
- Dipo Owolabi
- Apr 30
- 6 min read
Updated: May 2
This round of headlines is really one story told four ways: AI is now showing up in earnings, spending plans, valuation, and investor anxiety. Alphabet delivered the clearest proof yet that AI and cloud are translating into real profit, with revenue up 22% to about $110 billion and net income up 81% to $62.6 billion, while Waymo crossed 500,000 fully autonomous rides per week. At the same time, the biggest hyperscalers are headed toward roughly $725 billion of combined AI capex in 2026, Anthropic is being courted at a possible $850 billion to $900 billion valuation, and Meta’s stock is falling as Zuckerberg pushes its AI spending plan toward $145 billion. All this and more in today’s Read It And Eat! |
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MAJOR HEADLINES
Google’s Profits Jump 81% As Enterprise Business Grows
Alphabet just delivered one of the strongest earnings prints in big tech, with first-quarter revenue rising 22% to roughly $110 billion and net income jumping 81% year over year to $62.6 billion. The cloud division was the engine behind the beat, with Google Cloud revenue surging 63% to $20 billion, helped by demand for AI tools, enterprise workloads, and Alphabet’s own custom chips. The result was strong enough to push the stock higher after the release and reinforce the idea that Alphabet is no longer just an advertising company with AI ambitions; it is becoming one of the clearest monetizers of AI infrastructure demand.
The numbers also show how much scale Alphabet has built into its AI stack. Reuters said the cloud backlog reached about $460 billion, while the company raised its full-year capital expenditure outlook to $180 billion to $190 billion, signaling that management sees even more demand ahead. That kind of spending is not defensive; it is a statement that Alphabet believes its mix of AI models, infrastructure, and chips can keep converting demand into revenue at a pace the market had not fully priced in.
Waymo was another important proof point in the quarter. Alphabet said its autonomous driving unit has now surpassed 500,000 fully autonomous rides per week, doubling in less than a year, and it is already operating in 11 major U.S. cities after launching in Nashville and expanding into six new cities so far in 2026. That matters because it shows Alphabet’s “other bets” are no longer just experiments; at least one of them is beginning to scale into a meaningful commercial business with real usage momentum. Wall Street Journal
Big Tech Is Spending Even Bigger; With Plans to Spend
$650$725 Billion On AI Infrastructure
The broader message from the “Magnificent 7” earnings run is that the AI race is getting more expensive, not less. Yahoo Finance and other reporting say the combined AI infrastructure spending of the major hyperscalers is now expected to reach about $725 billion in 2026, a figure that reflects how much capital these companies are pouring into data centers, chips, networking, and power. Reuters has separately described the same spending wave as roughly $600 billion-plus, which is still an extraordinary outlay and underscores the same point: the scale of the AI buildout is huge and still rising.
What makes the number so important is that it is not coming from one company alone. Microsoft said it expects $190 billion of capex in 2026, Amazon is holding around $200 billion, Meta just raised guidance to $125 billion to $145 billion, and Alphabet moved to $180 billion to $190 billion. Taken together, that means the biggest tech firms are no longer simply making AI investments; they are now locked in a capital arms race where staying competitive requires spending at levels that would have looked unbelievable only a few years ago.
The market’s reaction shows the tension behind all that spending. Investors still like the growth story, but they are becoming more selective about which companies can prove that the money will produce durable returns. Alphabet’s strong earnings helped validate the thesis that AI spending can pay off quickly when paired with a full stack of products and infrastructure, while Meta’s reaction shows the opposite risk: if the spending rises faster than the proof of return, the stock gets punished. Yahoo Finance
Anthropic is now at the center of one of the hottest private-market fundraising stories in AI. TechCrunch reported that the maker of Claude has received multiple preemptive offers to raise around $50 billion at a valuation between $850 billion and $900 billion, with investors piling in so aggressively that one source described the demand as feverish. If that round closes near the top end of the range, it would more than double Anthropic’s last reported $380 billion valuation from February and push it into the same league as OpenAI’s latest $852 billion post-money valuation.
The reason investors are chasing it so hard is growth. TechCrunch says Anthropic’s annual revenue run rate has already surpassed $30 billion and may be closer to $40 billion, up from about $9 billion at the end of 2025. Much of that revenue is coming from its coding products, especially Claude Code and related enterprise tools, which has turned Anthropic into more than just a model maker; it is now a platform business with real commercial traction.
There is also a timing angle here that makes the valuation story even more striking. TechCrunch said this may be Anthropic’s final private round before a potential IPO, which would make the next financing decision a major milestone rather than just another fundraise. The board is expected to decide in May, and reports also say Anthropic’s private shares are now trading around a $1 trillion valuation on secondary markets, showing just how intense demand has become ahead of any public listing. Techcrunch |
Meta Shares Drop As Zuckerberg Plans A $145 Billion AI Spending Spree
Meta’s stock sold off after investors reacted to Mark Zuckerberg’s plan to push annual capital spending as high as $145 billion. Reuters reported that Meta raised its 2026 capex forecast to $125 billion to $145 billion, up from a prior range of $115 billion to $135 billion, and shares fell more than 6% in extended trading as investors worried about the cost of the company’s AI push. Even though quarterly revenue came in at $56.31 billion, beating estimates, the market focused on how fast the spending line is rising.
The concern is not just that Meta is spending more; it is that the company is spending more while also absorbing regulatory and legal pressure. Reuters said Meta warned that youth-safety litigation in the U.S. and Europe could produce a material loss, while the company also reported its first-ever quarterly decline in Daily Active People, partly due to disruptions in Iran and WhatsApp restrictions in Russia. Investors are also demanding a faster return on investment because they are still absorbing the roughly $60 billion Meta poured into the metaverse concept, and that history is making the current AI spending spree feel even more demanding and risky.
Meta is trying to frame the spending as necessary infrastructure for its AI future, but the market is demanding proof sooner rather than later. Zuckerberg has argued that tiny teams powered by AI can build products that once took dozens of people, and Meta is laying off staff while investing more in data centers, compute, and internal AI systems. The problem is that the company’s advertising business still carries the load today, so any expansion of AI ambition has to convince investors that the future return justifies a very large near-term bill. The Telegraph
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