Meta Platforms Inc. and Microsoft Corp. signalled sharply higher spending on artificial intelligence infrastructure, rattling investors and sending shares lower after their latest quarterly reports, according to Bloomberg.

Both companies are expanding data center capacity and investing in graphics processing units to meet surging AI demand. Microsoft reported a record 34.9 billion US dollars in capital expenditures in the September quarter, driven by Azure cloud expansion and its backing of OpenAI. CFO Amy Hood said demand continues to exceed current capacity, highlighting the urgency of further investment. The company’s commercial backlog now totals 392 billion US dollars.

Meta, which integrates AI into Facebook and Instagram, faces more uncertainty as it cannot monetize excess computing capacity externally in the same way as Microsoft. The Menlo Park-based company also posted a 16 billion US dollar tax charge and a 4.4 billion US dollar loss from its Reality Labs division, which develops AI smart glasses. CEO Mark Zuckerberg said selling surplus infrastructure remains a possible option if spending outpaces internal needs.

Alphabet Inc., in contrast, provided a more positive picture. Google Cloud revenue rose 34 per cent to 15.2 billion US dollars, and its Gemini AI assistant now has 650 million monthly active users. CFO Anat Ashkenazi said capital expenditures could reach 93 billion US dollars this year, up from an earlier 85 billion US dollar estimate, with further increases expected in 2026. Google has also seen its cloud backlog grow to 155 billion US dollars, nearly doubling in the past 18 months.

The reports underscore the financial stakes of the AI boom. While Microsoft and Alphabet can offset excess capacity through commercial cloud services, Meta’s investments are largely internal, intensifying scrutiny from investors concerned about the pace and scale of infrastructure spending.