US tech giants are on track to spend more than US$700 billion on AI capital expenditures this year, while Chinese cloud service providers are likely to spend about US$105 billion, according to a Morgan Stanley research report cited in the story. [1]
Google and Microsoft each said on Thursday that their full-year capex would reach about US$190 billion. Meta Platforms raised its capex estimate for this year to US$145 billion, and Amazon kept its capex outlook unchanged from last year at US$200 billion. [1]
Chinese firms have faced restrictions on buying the most advanced and expensive US chips for AI training and commercial use. In response, they have relied more on software and algorithm improvements, the report said. [1]
Tilly Zhang, China technology and industrial policy analyst at Gavekal, said China’s AI spending cannot be judged against US hyperscalers as a simple measure of underinvestment. “China’s AI investment scale can’t be directly compared to that of US hyperscalers as proof that it’s not investing enough in computing power,” Zhang said, adding that “good enough” Chinese models can still generate comparable business returns in the market. [1]
The gap follows a larger rise in US spending and a lower base in China. UBS China internet industry analyst Wei Xiong said in December that the AI capex of China’s internet giants stood at 400 billion yuan, or US$59 billion, last year. [1]
Morgan Stanley’s estimate puts Chinese cloud service providers at about US$105 billion in AI spending this year. The next major round of capex updates from US tech groups will be watched for further signs of whether that gap widens or narrows. [1]
