Google, Amazon Reaffirm Huge Data Center Investment Plans Amid Tariff Concerns

The chief executives of both Google and Amazon said this week that their companies will continue their unprecedented spending on data centers and other infrastructure for artificial intelligence despite tariff concerns and lingering questions around the future of AI computing demand. 

On Wednesday, Alphabet CEO Sundar Pichai reaffirmed Google’s previously announced plans to invest $75B in total capital expenditures this year, telling a conference audience that the firm’s capital spending remains focused on building new data centers and acquiring the computing equipment to go in them. 

Less than 24 hours later, in a letter to investors and an interview on CNBC, Amazon CEO Andy Jassy reiterated his company’s commitment to staying the course on its skyrocketing data center capex — spending that the company previously said would reach $100B this year. 

“We have such high demand right now for AWS, and AI growth is so significant that we don’t see any attenuation of demand, and we’re going to keep building,” Jassy told CNBC Thursday.

That leaders of two of the four largest global data center users sought to publicly confirm their capex plans this week is no coincidence. 

Amazon, Google and their Big Tech brethren Microsoft and Meta are set to spend a combined $270B on data centers this year, according to Citigroup, although the AI-driven spending spree is increasingly being questioned by investors and industry observers.

Now, the potential impact of the Trump administration’s tariff policies on these tech giants’ bottom lines has put that spending under even greater scrutiny. 

Uncertainty around U.S. trade policy sent Big Tech stocks on a roller coaster ride this week, with the administration’s shifts on tariffs prompting plunges and rallies that saw Meta’s market cap fluctuate by as much as 15% on Wednesday. Trump that day announced a pause on his tariff policy, reducing rates for most countries to 10% while raising China's to 145%. 

This sensitivity to trade barriers and talk of a broader recession — along with the higher data center construction costs tariffs may bring — has some commentators raising doubt as to whether aggressive spending on data centers will continue in the face of a widespread economic downturn or extended period of uncertainty.  

“Sustaining the boom hinges on the tech companies’ willingness to stick with current and future spending plans against a rapidly weakening economic backdrop,” Wall Street Journal columnist Asa Fitch wrote on Wednesday. “That is a lot to ask. Probably too much.”

The tariff turbulence has added to a growing narrative of skepticism about whether bullish demand projections for AI computing and data center capacity will ever come to fruition.

Chinese firm DeepSeek’s January release of an AI model that seemed to use far less compute than competing products cast doubt on the fundamental thesis underpinning the sector's boom: that the world’s largest tech companies need to continue spending hundreds of billions of dollars on data centers to achieve their AI goals.

Combined with investor frustration over sluggish AI revenue and fear of an AI bubble, DeepSeek amplified what had been fringe concerns that Big Tech and the broader data center industry could be oversupplying the market.   

“Tech companies were already pretty far over their skis with spending on AI before tariffs came into the picture,” Fitch wrote.

These oversaturation fears seemingly gained supporting evidence this week when Microsoft confirmed that it is “slowing or pausing” some data center construction, including a planned $1B build-out in Ohio and part of a planned megacampus in Mount Pleasant, Wisconsin.  

But even in confirming the paused projects, which many analysts attribute to Microsoft’s diminishing infrastructure partnership with OpenAI, Microsoft Cloud President Noelle Walsh emphasized in a LinkedIn post Tuesday that the company isn't backtracking on its previous plan to spend north of $80B on data centers this year. 

“This year, Microsoft is on track to spend more than $80B to continue building out our datacenter infrastructure and these investments are informed by near-term and long-term demand signals,” Walsh wrote. “Customer demand for our cloud and AI services continues to increase as reflected by strong growth in revenue and customer commitments in Microsoft Cloud and AI.”

Big Tech leaders have pushed back on the idea that there is anything close to an oversupply of data centers. In his comments Thursday, Amazon’s Jassy delivered a similarly bullish prognosis for the future of his firm’s AI infrastructure spending.  

Within less than a decade, AI applications will become necessary to remain competitive across broad swaths of the economy, Jassy said, and the infrastructure spending to support those applications needs to happen today even if it could be months or years before the full return on that investment is realized. 

But he said he sees no sign of any near-term slowdown in demand for AI computing, either, pointing to Amazon Web Services’ AI revenue growing at triple-digit percentages year-over-year.

Tariffs or no tariffs — and even if investor confidence in the wisdom of aggressive AI investment wanes — Jassy told investors Thursday that Amazon's ability to remain competitive today and years in the future hinges on the company continuing to spend big on data centers. 

“We continue to believe AI is a once-in-a-lifetime reinvention of everything we know, the demand is unlike anything we’ve seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now,” Jassy wrote.