Analysis: Will Big Tech’s Massive AI Spending Hurt Europe’s Data Sovereignty?
Big Tech companies are spending huge amounts of money on artificial intelligence (AI). In 2026, they are expected to invest more than $700 billion (€590 billion) in AI infrastructure. This is about 75% more than what they spent in 2025.
Many of the biggest US technology companies have recently shared their earnings reports and future spending plans. The number that shocked Wall Street the most is the total capital expenditure (CapEx) for AI. CapEx is money companies spend to build or improve long-term assets like data centres, computer chips, and advanced technology.
The $700 billion being spent this year is larger than the entire economy of Sweden in 2025, according to IMF estimates. This shows just how large the AI race has become.
At the same time, global chip sales are expected to reach $1 trillion this year for the first time, according to the US Semiconductor Industry Association. Major banks and consulting firms such as JPMorgan Chase and McKinsey & Company believe total AI investment could pass $5 trillion by 2030 because of extremely high demand for computing power.
What Is CapEx and Why Does It Matter?
CapEx refers to long-term investments in physical and digital infrastructure. These costs are not fully recorded in one year. Instead, companies spread the cost over several years through depreciation.
High CapEx usually shows that a company is investing in future growth. In the case of AI, companies are building data centres, buying advanced chips, and upgrading networks to support powerful AI systems.
The big jump in spending confirms a trend that started in 2025, when Big Tech companies already spent around $400 billion on AI infrastructure.
As Jensen Huang, CEO of Nvidia, said at the World Economic Forum in Davos, this is “the largest infrastructure build-out in human history.”
Who Is Spending the Most?
At the top of the list is Amazon. The company plans to invest about $200 billion in AI infrastructure in 2026 alone. This is more than the combined GDP of the three Baltic countries.
Next is Alphabet Inc., the parent of Google, which plans to spend $185 billion. Microsoft will invest around $145 billion, while Meta Platforms will spend about $135 billion.
Oracle Corporation has also increased its AI investment to $50 billion.
Meanwhile, Tesla, Inc. plans to spend nearly $20 billion, mainly to develop its robotaxi fleet and improve the Optimus humanoid robot. Another company owned by Elon Musk, xAI, will spend at least $30 billion in 2026.
xAI is building a new $20 billion data centre called MACROHARDRR in Mississippi. It is also expanding “Colossus,” a large data centre cluster in Tennessee, described as one of the world’s biggest AI supercomputers.
Recently, SpaceX acquired xAI in an all-stock deal. The combined company is valued at around $1.25 trillion, making it one of the most valuable private companies in history.
Apple Inc. is spending much less compared to others. Its projected AI CapEx is about $13 billion. Instead of building everything alone, Apple signed a partnership with Google to use Gemini AI models in its products. This means Apple is relying more on outside technology instead of investing heavily in its own AI infrastructure.
Nvidia: The Big Winner?
Among all these companies, Nvidia seems to benefit the most. The company designs and sells advanced AI chips. These chips are essential for building and running AI systems.
During a previous earnings call, Jensen Huang said that building one gigawatt of AI data centre capacity could cost between $50 billion and $60 billion. About $35 billion of that could go directly to Nvidia hardware.
Since almost every major tech company needs Nvidia chips, the company is likely to receive a large share of the $700 billion spending.
Is Wall Street Worried?
Investors have mixed feelings about this huge investment wave.
On one hand, they understand that AI is very important for the future. Companies that fall behind may lose their competitive position.
On the other hand, the size of the spending is causing concern. Much of this investment is financed through borrowing. Morgan Stanley estimates that hyperscalers could borrow around $400 billion in 2026. This is more than double what they borrowed in 2025.
This could push total US corporate bond issuance to record levels.
Right now, expected AI revenue for 2026 does not match the massive investment. There are risks. For example, hardware can become outdated quickly because technology changes fast. Energy costs for running data centres are also extremely high.
Even Google CEO Sundar Pichai admitted that there are “elements of irrationality” in the current spending pace.
Some investors are also cautious. Michael Burry, famous for predicting the 2008 financial crisis, has warned that the AI boom could become a bubble.
In simple words, Big Tech is taking a big financial risk. If AI growth continues strongly, they could dominate the future digital economy. If not, they could face heavy losses.
What About Europe?
While the US is spending hundreds of billions, Europe’s position looks weak.
The European Union has launched programs like the AI Factories initiative and the AI Continent Action Plan. These aim to increase public and private investment in AI.
However, total European spending on sovereign cloud data infrastructure is expected to reach only €10.6 billion in 2026. Even though this is an 83% increase, it is very small compared to US spending.
One important European AI company is Mistral AI. Its CEO, Arthur Mensch, said that US companies are building something like a new Apollo program every year.
Mistral AI raised €1.7 billion in funding in 2025, with ASML leading the investment. The company plans to spend €1 billion in 2026 and is building a €1.2 billion data centre in Borlänge, Sweden.
This new data centre will provide “sovereign compute,” meaning it follows EU rules and keeps data inside Europe. It will use Sweden’s green energy and is expected to open in 2027.
This is a key step for European data sovereignty. It shows that Europe wants to reduce its dependence on American technology companies.
Sovereign Cloud vs US Control
US tech companies are trying to address European concerns by offering “localised cloud zones” in countries like Germany and Portugal. They promise that European data will stay inside Europe.
However, critics argue that these systems are still controlled by US parent companies. This means Europe could still be affected by US laws, economic decisions, or foreign policy.
This raises an important question: Can Europe truly control its own digital future if its infrastructure depends on American companies?
The Big Question: Who Will Win?
The United States is making a bold bet. Its biggest companies are spending record-breaking amounts and borrowing heavily to secure AI leadership.
Europe, on the other hand, is moving more carefully. It focuses on regulation, data protection, and targeted investments. The EU’s AI Act is one of the strictest AI regulations in the world.
But as Arthur Mensch pointed out, regulation alone cannot create computing power. Without strong infrastructure, Europe risks falling further behind.
In the coming years, we will see whether Big Tech’s massive AI spending creates long-term dominance or financial trouble. We will also see whether Europe can build enough independent infrastructure to protect its data sovereignty.
For now, the balance of power clearly favours the United States. The scale of American investment is simply much larger.
The AI race is no longer just about innovation. It is about capital, infrastructure, and geopolitical power. And at the moment, Big Tech is betting everything on winning it.
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