Big Tech earnings season begins next week with Google, but the most important number won’t be profits or revenue. It will be how much these companies say they will spend on AI data centers.

Google, Amazon, Microsoft and Meta have already laid out plans to spend more than $700 billion this year. Investors know that companies are racing to add computing power. The harder question is how much additional capacity those dollars can actually buy.

The answer is getting worse. Memory chip prices have skyrocketed, while electrical equipment, construction materials, skilled workers and electrical connections are all harder to come by.

Morgan Stanley now estimates that the cost of building a gigawatt of AI capacity has increased by approximately 20% for several leading systems. A common Nvidia-based configuration, for example, has gone from about $29 billion to $35 billion per gigawatt; a newer version has risen from $41 billion to $49 billion.

That creates a nasty loop. Big Tech is ordering more equipment for AI data centers. The shortage is getting worse. Prices go up. Companies then increase spending forecasts in part to cover those higher prices, creating even more demand and even higher prices.

Brad Gastwirth, head of research at Circular Technology, estimates that 20% to 30% of the next increase in AI capital spending will reflect inflation, while 70% to 80% will still represent real expansion. In other words, higher spending doesn’t always mean AI development is accelerating at the same pace.

“Investors should be careful when interpreting higher capital spending. There is absolutely an inflation component,” Gastwirth told me recently.

That distinction is important for investors. Previous research found that skyrocketing memory prices could explain about 45% of the capital spending growth of large cloud companies this year.

Cantor Fitzgerald analysts expect little change to 2026 capital spending plans this earnings season, but see 2027 estimates rising sharply, including $283 billion for Google, $271 billion for Amazon and $200 billion for Meta.

So will someone blink and stop increasing capex? Probably not yet. No company wants to appear cautious as its AI rivals get ahead of themselves. But this time let’s listen carefully to what accompanies any increase in spending.

“When companies discuss capital spending, I would pay close attention to whether they are also talking about power capacity, GPU deployments, memory purchases, networking and new data center campuses,” Gastwirth said. “If capital spending increases along with those metrics, it points to genuine expansion and not simply higher costs.”

Without those details, a higher capex figure may simply mean that Big Tech is paying more to sit still.

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