Microsoft added $25 billion to its 2026 AI capital expenditure budget due to skyrocketing memory chip costs bringing total capex to $190 billion 23 percent above analyst expectations. CFO Amy Hood disclosed the surprise cost increase during Q1 earnings on April 29 attributing it specifically to higher component costs including memory chips. The unplanned spending reveals a hidden infrastructure crisis within Big Tech record $725 billion AI spending spree memory supply cannot keep pace with data center demand and the economics are breaking.
This was not budget padding. Microsoft Google Meta and Amazon collectively announced $725 billion in AI capex for 2026 up 77 percent from last year record $410 billion. Yet only one of them Google convinced investors the spending is paying off. Google stock traded higher on Cloud revenue surging 63 percent while Meta dropped 6 percent after raising its capex range to $145 billion. Microsoft sits in the middle strong AI run rate $37 billion annually up 123 percent but blindsided by memory costs nobody forecasted.
