Michael Burry, ‘The Big Short’-fame investor, said Tuesday that big technology companies’ data center spending spree is driven by an expectation that the industry’s winners will be protected as an oligopoly too large to fail.
CEOs Are Betting on an Oligopoly
“The only reason the CEOs of these tech monopolies are spending wildly on data centers like they are is because they assume they will be granted an oligopoly that is too big [to] fail,” Burry said in a post on X.
JPMorgan estimates AI capital spending could rise from roughly $700 billion this year to $1 trillion next year, while Goldman Sachs expects the five biggest hyperscalers to issue about $250 billion in bonds this year and $400 billion in 2027.
Space Exploration Technologies Corp. (NASDAQ:SPCX) is reportedly seeking $40 billion in loans and debt, led by Apollo Global Management (NYSE:APO), to buy Nvidia Corp. (NASDAQ:NVDA) chips, according to the Financial Times.
Trump Casts the Buildout As a Race With China
President Donald Trump‘s Sept. 29 executive order, “Inaugurating the Era of Super Intelligence,” said frontier systems have outgrown the label “artificial intelligence” and told federal agencies to start calling the technology “Super Intelligence.”
At a rally Saturday in Vandalia, Ohio, the president cast data centers as a race with China.
He has also floated a “dividend” for communities that host data centers and called the facilities “the oil” of the next 25 years.
Big Tech Can’t Build Fast Enough
Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), and Microsoft Corp. (NASDAQ:MSFT) are on track to spend roughly $590 billion to $600 billion on capital expenditures this year, much of it on data centers and AI infrastructure.
Meta Platforms Inc. (NASDAQ:META) has reportedly described some of its AI data centers to the IRS as “pilot models” to claim federal research tax credits, which cut its tax bill by $3.9 billion in 2025, according to The New York Times.
Price Action: Shares of Amazon closed 1.95% higher on Tuesday at $256.29 and climbed 0.36% in extended trading to $257.22, according to Benzinga Pro.
Benzinga Edge rankings indicate Amazon’s stock has a Momentum score in the 73rd percentile and a Quality score in the 58th percentile.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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