AI Infrastructure Investment Boom Sweeps Silicon Valley and Wall Street

U.S. Tech Giants Step Up AI Investments — Microsoft, Google, and Nvidia Lead the Charge
Asset Managers Pour Billions into Data Centers and AI Infrastructure
As the AI Boom Lifts Valuations, OpenAI Soars While Cloud Titans Face Profit Pressures

Microsoft has dramatically expanded its investment in artificial intelligence (AI) infrastructure, pouring tens of billions of dollars into enhancing its cloud services amid the rapid growth of the AI market. Alongside Microsoft, major tech companies such as Google and Nvidia—as well as asset management firms like BlackRock—are also ramping up aggressive investments in AI-related projects.

AI Investment Boom Sweeps Big Tech

According to a Reuters report on the 30th (local time), Microsoft’s capital expenditures in the July–September fiscal first quarter surged 74% year-on-year, with 35 billion dollars allocated to AI infrastructure. The spending largely went toward securing short-term assets such as Nvidia’s high-end GPUs, which are essential to easing cloud service bottlenecks. The figure far exceeded market tracker Visible Alpha’s estimate of 30.3 billion dollars.

The wave of AI-related investment is not limited to Microsoft. Google, for example, spent 52.5 billion dollars on its AI business in 2024 and has continued to raise its investment targets throughout the year. After announcing a 75 billion dollar spending plan in February, the company increased it to 85 billion in July, and during its third-quarter earnings release on the 29th, further revised it upward to between 91 and 93 billion dollars.

Nvidia has also joined the rush, reportedly investing 2 billion dollars in a 20 billion dollar funding round for Elon Musk’s AI company, xAI. Analysts note that Nvidia has recently signed large-scale GPU supply deals not only with OpenAI but also with xAI, reinforcing its central role in the AI ecosystem. One market observer commented, “This is an investment in the future — as AI companies expand, Nvidia’s GPU sales, essential for both training and operation, will continue to rise.”

Institutional Capital Flows Into AI Infrastructure

As the AI market heats up, asset managers and private equity firms are rapidly joining the investment wave. On the 15th, BlackRock—the world’s largest asset management firm—announced the formation of the AI Infrastructure Partnership (AIP) alongside Nvidia, Microsoft, and Abu Dhabi’s sovereign wealth fund–backed AI investor MGX. The consortium plans to invest 40 billion dollars to acquire Aligned Data Centers, a data center design and operations company. The deal marks both AIP’s first investment and BlackRock’s largest-ever infrastructure commitment. Including debt financing, AIP aims to deploy a total of 100 billion dollars into AI-related infrastructure projects.

BlackRock has also emerged as a key financial backer of Meta’s massive Hyperion data center under construction in Louisiana. Out of the 27 billion dollars required for the project, BlackRock purchased over 3 billion dollars in bonds to support funding. The lead investor, private equity firm Blue Owl Capital, holds an 80% stake, while global asset manager PIMCO reportedly bought around 18 billion dollars in bonds.

For companies unable to attract large-scale AI funding, cloud and on-premises infrastructure have become practical alternatives. Recently, the use of on-premises systems has increased, particularly for developing and deploying generative AI. While public cloud platforms remain popular for proofs of concept and pilot projects due to their flexibility, on-premises infrastructure is proving more advantageous for full-scale operations where data utilization and security are critical.

Winners and Losers in the AI Investment Boom

The global rush into AI has sharply boosted the valuations of companies directly engaged in the field. According to a Reuters report on the 29th, OpenAI is preparing for an initial public offering (IPO) that could value the company at up to 1 trillion dollars. The company is reportedly targeting a 2027 listing and considering submitting its application to regulators in the second half of next year.

If realized, OpenAI’s IPO would rank among the largest in history. Early discussions suggested the company could raise at least 60 billion dollars through the offering, though both timing and scale may shift depending on market conditions. An OpenAI spokesperson stated, however, that the firm “is not currently focused on an IPO” and remains committed to “ensuring that the benefits of artificial general intelligence (AGI) are shared broadly by strengthening its core operations.”

While OpenAI stands out as a clear beneficiary of the AI boom, prospects for the cloud sector are less optimistic. Microsoft’s Azure achieved record quarterly revenue of 75 billion dollars in the fourth quarter of fiscal 2025, but the company is expected to struggle to balance surging data center demand through year-end. Google Cloud, buoyed by improved performance, has also announced additional AI and infrastructure investments, though near-term profitability remains uncertain. Meanwhile, Amazon Web Services (AWS) has drawn concern from investors for lagging behind Microsoft and Google in growth, despite maintaining solid profits.