Nvidia CEO: AI at an ‘inflection point’
Global data center spending could hit $1T by 2028
Chipmaker Nvidia is betting that data center investment will grow as the mass deployment of AI software requires new age hardware.
“AI is going through an inflection point,” Chief Executive Jensen Huang said during the Nvidia GTC conference this week. “It has become more useful because it’s smarter and it can reason.”
As industries across the economy deploy AI technology, they will need more data and computing power to run models at scale, Huang said, adding this is where Nvidia’s AI factories will step in.
“I expect data center build-out to reach to reach $1 trillion and I am fairly certain that we will reach there very soon,” Huang said. “The future of software requires capital investment.”
The San Francisco-based company reported data center revenue of $35.6 billion, up 93% year over year during its fourth-quarter earnings call on Feb. 26.
Big tech commits big bucks to AI
Major tech companies, including Meta, Amazon, Google, Microsoft and Apple, have announced large capital expenditures for 2025 to develop AI and its infrastructure.
“We anticipate our full-year 2025 capital expenditures will be in the range of $60 billion to $65 billion,” Susan Li, chief financial officer at Meta, said during the company’s earnings call on Jan. 29. “We expect capex growth in 2025 will be driven by increased investment to support both our generative AI efforts and our core business.”
Major tech companies have earmarked the following for AI capex:
| Company | 2025 | 2024 | ∆ YoY |
| Amazon | $100 billion | $83 billion | 20% |
| $75 billion | $52 billion | 44% | |
| Microsoft | $80 billion | $50 billion | 60% |
| Meta | $65 billion | $54 billion | 20% |
Source: Bank Automation News analysis of company earnings reports
The emergence of Chinese firm DeepSeek’s AI model has flipped AI development mathematics on its head, and such developments are “likely to slow the furious pace of growth in AI infrastructure spending over time,” Vincent Gusdorf, associate managing director digital finance and AI analytics at Moody’s Ratings, told Bank Automation News.
Microsoft has moved to cancel multiple data center leases for 2025 as it deals with “a potential oversupply position” according to a Feb. 24 TD Cowen report.
The dropping interest and usage of OpenAI solutions might be behind the pullback of leases for Microsoft, the report stated, noting that “the company may have excess data center capacity relative to its new forecast.”
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