Caroline Hyde

But you've got to be sticking around because we thank you, Ed.

We're coming back to you because throughout the show, we'll have interviews.

But at the end, we'll have a sit-down interview with AWS CEO Matt Garman at 3 p.m.

Eastern Time.

Meanwhile, look, this is all a story of infrastructure about big tech companies such as Amazon, but also Alphabet, Meta and Microsoft spending heavily on AI with expected capital expenditure of over $380 billion combined in their current fiscal years.

That's going against big tech's mantra for the past two decades, let's call it, which is more about delivering growth while keeping really tight lid on spending.

It's a real flip reverse.

Let's talk about it with Bloomberg's tech equity reporter, Carmen Reinecke.

And sort of you've all been assessing how investors take this sudden wild capital expenditure.

Yeah, I mean, it has been the talking point and the thing that we've been focusing on the most with some of these big companies.

And

As you said, it really represents a change from how they've operated over the last two decades.

They really had very capital light businesses and were able to be very profitable, grow exponentially in some ways because of that.

And so now having this shift, we're seeing investors reward it on some ends and then really punish it on others.

So, you know, Microsoft, we saw

you know, jump after its latest earnings report, but Meta sort of got hit because Zuckerberg, you know, didn't explain enough about the return on investment of this spending.

The other thing that's interesting is that this capital expenditures as a portion of revenue have jumped, which to a level that's not normal for tech companies.

So for Microsoft, its capital expenditures are now 20% of its revenue.

And in addition, you know, Alphabet and Amazon, these spending to sales ratios are some of the highest in the market.

Okay, so we now have to perhaps