Big Tech's capex growth may be far slower than it looks (www.businessinsider.com)

Big Tech's capital expenditures (capex) are set to hit approximately $600 billion this year, reflecting a significant investment surge driven primarily by the escalating demand for AI-related infrastructure. However, new analysis from RBC Capital Markets reveals that much of this growth may be misleading, as it is largely attributed to skyrocketing memory prices rather than increased hardware purchases. Analysts estimate that memory costs, such as DRAM and NAND flash, could account for around 45% of the expected capex growth in 2026, with prices projected to more than double in the coming years. This revelation highlights a significant trend within the AI/ML ecosystem: while investments in AI infrastructure remain strong, the rising costs of critical components may temper the true pace of expansion. Without factoring in the surge in memory prices, Big Tech's projected capex growth could decline to about 40% in 2026 from an impressive 80% in 2025, indicating a notable deceleration. This scenario underscores the complexities of the current tech landscape, where the demand for AI capabilities is colliding with a constrained memory market, shaping the future of investment strategies across the industry.