Technology companies didn’t ease up on massive investments in AI technologies in the first quarter of 2025 even if some are uncertain about the overall economic picture.¹ 

Alphabet, Meta Platforms, Amazon, and Microsoft remain on pace to spend up to $320 billion combined on AI capital expenditures in 2025, up from $230 billion in 2024.²

Growing customer demand for AI continued to be a major earnings theme in recent earning results as companies build and deploy data centers, graphic processing units, and other hardware, AI training models, and cloud-based applications, among other things.³

Amazon and Google parent Alphabet reiterated their 2025 AI spending projections of $100 billion and $75 billion, respectively, during first-quarter earnings calls.⁴ Meta upped its AI spending estimates to between $64 billion to $72 billion, up from a prior range of $60 to $65 billion, due to possible tariff costs.⁵

Microsoft was one of the few companies to hint at moderated AI spending — ever so slightly.  Microsoft spent $21.4 billion on AI expenses in the first quarter, about $1 billion less than the prior quarter and its first decline in more than two years. The company is sticking with plans to spend a total of $80 billion this year.⁶

Elsewhere, Apple has plans to spend $500 billion on AI and related investment over the next four years.⁷ The company did warn about uncertain economic conditions and said tariffs could add $900 million to the company’s costs in the second quarter.⁸

Business demand 

But uncertainty isn’t dampening AI investment or demand from customers. Amazon CEO Andy Jassy said the company has seen unprecedented demand for AI-powered coding agents designed to take a lot of the busy work out of building software.⁹

The next big signal of customer demand for AI will come at the end of May when leading AI chipmaker Nvidia releases its earnings.¹⁰ The company recently topped a $3 trillion valuation for the first time since February.¹¹  

A recent report from IBM shows that businesses continue to seek out AI developments. Retail and consumer products companies plan to allocate an average of 3.32% of their revenue to AI — which translates to $33.2 million annually for a $1 billion company.¹²

The survey of 1,500 companies showed that many organizations are in the early stages of AI adoption, using it for functions like business forecasting, creating promotions, and inventory management. Human resources help desks are another popular use.¹³

While optimism is high, only 25% of AI initiatives have delivered the expected return on investment over the past three years, according to another study.¹⁴

Some industry analysts say AI FOMO, or Fear of Missing Out on AI, can lead to impulsive spending decisions if companies lack a long-term strategy on how to best leverage the technology for their operations.¹⁵

Read more: How emotions and mood influence financial behavior

AI insurance emerges 

Empower research shows that most Americans are more likely to trust AI-driven financial tools if they include some level of human oversight.

Some AI-enhanced tools, especially customer service bots and AI-enhanced search engines have been prone to errors and other misleading results with the potential to embarrass companies or trigger lawsuits.¹⁶

As AI deployment increases, so have insurance needs. Insurers at Lloyd’s of London recently introduced a new product to cover business losses or legal liabilities that stem from potential AI chatbot errors on things like advice or pricing.¹⁷

Some insurers already cover AI-related losses as part of general technology policies, but many only allow low payout amounts.¹⁸

Alphabet has taken a similar step to manage AI risks by entering into an alliance with several insurance companies to offer specialized cybersecurity insurance to Google Cloud customers. The policies include items like business interruption coverage and loss protection for malfunctioning AI tools.¹⁹

Read more: Ask AI: Are we in the era of dynamic pricing?