With earnings seasons getting underway, analysts are pushing to give investors more information on the amount tech companies deeply intrenched in AI spend, and how much each company individually earns. 

Google’s parent company Alphabet, Amazon, Apple, Meta Platforms, and Microsoft are scheduled to report fourth-quarter earnings this week. Knowing how the companies spend money gives marketers insight into future advertising and marketing services.

Capital expenditures (CapEx) are difficult to pin down, but it’s important for marketers to understand where the investments go.

CapEx describes the money a company uses to purchase, maintain, or expand fixed assets — long-term resources that are not liquid or current — and assets that support advertising of other services. The company typically uses these assets for more than a year.

Dan Salmon, partner at New Street Research, estimates Amazon, Google, and Meta will remain at levels between 9% and 11% above the 2024 consensus. 

Google guided 2024 CapEx above 2023, increasing from $31.8 billion in 2023 to $40.2 billion in 2024. Consensus, Salmon wrote in a research note, is about $36.5 billion. 

New Street Research wrote in a research note that Amazon has guided analysts to $50 billion of CapEx, including finance leases for 2023, and expects this to rise to $64.8 billion in 2024. Meta has guided to between $30 billion and $35 billion of CapEx in 2024.

“We think [Meta’s] range is increased slightly considering the GPU build, but the purchases can fit within the current guidance.”

As Salmon points out, investors are increasingly focused on how companies will generate revenue from generative AI (GAI) products and services.

Estimates that have been broken into categories for Google in 2024 include chips at $12.5 billion, networking at $1.8 billion, other server costs at $5.1 billion and buildings and equipment at $10.6 billion. 

Estimates broken into AI accelerator CapEx in categories for Alphabet, Google’s parent, in 2024 include chips at $12.5 billion, networking at $1.8 billion, other server costs at $5.1 billion, and buildings and equipment at $10.6 billion. 

Salmon says it is interesting to note that Google’s Tensor Processing Unit (TPU) now sits at its fifth generation, after launching Cloud TPU v5e at Google Cloud Next in August 2023 and TPU v5p in December 2023.

Salmon does not break down Microsoft, but he does provide the details for Amazon and Meta. 

Alphabet and Microsoft report earnings on Tuesday. Investors and marketers want platforms to show them the money. “There’s a lot of pressure for Microsoft and Alphabet to show tangible evidence that their AI bets are paying off,” Daniel Morgan, senior portfolio manager at Synovus Trust Co., told Bloomberg on Monday. 

Analysts are looking for a “clear number” to use to grade stock at the end of the quarter.

Companies that make the chips like Nvida can trace AI performance and fortunes to the the sales of its products. Alphabet, Microsoft and others do not neatly break out AI-driven sales because AI is interwoven throughout their businesses. That will change.

Bloomberg points out that some proof of AI’s rising prominence at Google and its parent Alphabet can be seen in its cloud computing division, which reported a profit for the first time last year on the back of more business from AI startups.

The media outlet compared the reporting with Microsoft, which is more specific and sometimes discloses the growth in its cloud product Azure, that comes from generative AI.

With earnings seasons getting underway, analysts are pushing to give investors more information on the amount Amazon, Google, and Microsoft spend on AI and how much each company individually earns.