Cotton Capital Management believes that Amazon's latest 2026 CapEx forecast to $220 billion, Google's guidance of $195-205 billion (cotton uses the median of $200 billion), Microsoft's approximately $175 billion, and Meta's $130-145 billion (median of approximately $138 billion), totaling approximately $733 billion.
The US FY2026 defense budget has a base discretionary budget of $838.7 billion, thus representing approximately 87%.
The real signal is that AI development has evolved from tech sector spending to a macro-level capital expenditure cycle: the annual investment of these four companies is already close to the defense budget of a superpower, and Alphabet and Amazon still claim that computing power is in short supply.
Funding will continue to flow into GPUs/ASICs, HBMs, data centers, power grids, cooling, and building equipment, while massive depreciation and cash outlays are beginning to become new constraints on tech company profits and free cash flow.
