Analyst questions Big Tech’s AI spending boom

Microsoft and Amazon have reaffirmed plans to commit tens of billions to data centres, AI chips, and cloud capacity, reinforcing investor confidence that AI demand will keep expanding. Tech analyst Ed Zitron argues the market is misreading that spending as evidence of broad-based adoption across the industry.

Zitron says much of the infrastructure build-out is effectively supporting OpenAI and Anthropic, which he describes as unprofitable and dependent on external funding. Citing estimates he attributed to UBS and Barclays, he warned that a growing share of future cloud revenue at Google Cloud and Amazon Web Services could come from those companies, creating a more concentrated and circular AI economy than investors expect.

The warning lands as Wall Street asks whether heavy AI spending is producing meaningful revenue, cash flow, and lasting profits. Supporters argue that major technologies often require large upfront investment before returns arrive, while sceptics say demand could slow and make the infrastructure expansion harder to justify.