When will there be a return on the huge AI investment? The patience of investors is being tested by the three major technology giants.

The world's largest tech companies are betting on the future of artificial intelligence (AI) driven by massive data center clusters. Today, the staggering cost of this strategy is becoming increasingly clear, putting Wall Street's nerves to the test. The three major players in the tech industry - Alphabet (GOOGL.US), Meta Platforms (META.US), and Microsoft Corporation (MSFT.US) - collectively spent around $78 billion on capital expenditures in the last quarter, an 89% increase year-on-year. This money is primarily used for data center construction, as well as filling them with graphics processing units (GPUs) and other equipment. At the same time, all three companies have raised their future spending expectations, causing unease among investors who are already sensitive to large investments. In after-hours trading on Wednesday, both Meta and Microsoft Corporation saw their stock prices fall as both companies disclosed this massive expenditure in their quarterly reports. Meta also warned that capital expenditures in 2026 will be "significantly higher" than in 2025. Although investors in Alphabet Inc. Class C remained relatively calm about the spending increase, with the company's stock rising by over 6% in after-hours trading, these three reports have once again raised questions in the market: is the AI investment frenzy forming a bubble? Bernstein analyst Mark Moerdler asked during a conference call with Microsoft Corporation executives, "Do you have confidence that these AI investments will bring returns? Or, to be frank, are we in a bubble?" In response, Microsoft Corporation's Chief Financial Officer, Amy Hood, reiterated that even with investments of hundreds of billions of dollars over the past few quarters, the company still cannot meet the current demand for AI and other services. She said, "I thought we would catch up on demand, but that is not the case. Demand is still growing, and it is not concentrated in one place, but increasing in multiple areas at the same time." Microsoft Corporation ignited the global AI wave by investing $13 billion in OpenAI. The company's expansion of data centers is seen as crucial to maintaining its leading position in the AI field. However, Microsoft Corporation still surprised the market - its capital expenditures in the quarter ending in September set a record at $34.9 billion. Microsoft Corporation's Azure cloud computing division - the main vehicle for the company to recoup its AI investments - continues to grow revenue rapidly, but the growth rate is roughly consistent with the previous quarter. If the growth rate is higher, it will further prove the value of this investment frenzy. Meanwhile, Alphabet's Alphabet Inc. Class C provided a more encouraging outlook. The company reported that its Gemini AI assistant now has 650 million monthly active users, a 44% increase from three months ago. The number of billion-dollar contracts signed by Alphabet Inc. Class C's cloud platform in the first nine months of this year has exceeded the total for the past two years. Alphabet Inc. Class C's cloud business revenue grew by 34% to $15.2 billion, higher than the market estimate of $14.8 billion. But Alphabet Inc. Class C's spending is also on the rise. The company's Chief Financial Officer, Anat Ashkenazi, said that the company expects capital expenditures to reach as high as $93 billion this year, higher than the previous estimate of $85 billion; there will be a "significant growth" next year. The market will gain a clearer picture of the cloud computing industry on Thursday when the industry leader Amazon.com, Inc. (AMZN.US) reports earnings. Apple Inc. (AAPL.US) also plans to announce quarterly results later that afternoon. Among the three companies that reported earnings on Wednesday, Meta's situation was the most shocking to the market. Besides the $16 billion tax expense, the company also warned that the growth rate of capital expenditures next year will "significantly accelerate." Unlike Microsoft Corporation and Alphabet Inc. Class C, Meta is not a large cloud service provider serving external customers, meaning its investment frenzy may carry higher risks. If Microsoft Corporation and Alphabet Inc. Class C overestimate the demand for AI services, they can still sell excess computing power to others, as external demand remains strong. Both companies reported massive backlogs of orders - the total amount that customers have already committed to spending in the future. Microsoft Corporation's backlog of orders from commercial customers (including some non-cloud business expenses) was $392 billion; Alphabet Inc. Class C's was $155 billion, almost double what it was 18 months ago. In contrast, the prospects for Meta's AI investment return are more uncertain. The company is integrating AI services into Instagram and Facebook, and says that these investments will help it target advertising more accurately - advertising is still the main source of revenue for this Menlo Park, California-based company. Meta CEO Mark Zuckerberg said during the earnings call that if the company eventually spends too much on infrastructure, there are other options. For example, Meta can sell computing power to other companies. He said, "We haven't done that yet, but obviously, if there is eventually an overbuilding situation, that is also an option." Meta also faces concerns about spending from its Reality Labs division, which is responsible for developing AI smart glasses and other wearable devices. In the third quarter, this division lost $4.4 billion, with revenue of only $470 million. However, Zuckerberg believes that smart glasses are a "huge opportunity." He believes that in the field of AI, the real risk is not investing too much, but investing too little. He said, "I think we are still in the early stages, but we have already seen returns in our core business. This gives us the confidence to increase investment and ensure we are not underinvesting."