# Developed market tech firms’ CapEx-to-sales ratio hits record 12%, signaling a new era of AI spending > Source: > Published: 2026-06-16 19:19:48+00:00 # Developed market tech firms’ CapEx-to-sales ratio hits record 12%, signaling a new era of AI spending Big Tech's capital intensity has surged four percentage points since 2022, with projections pointing to even more aggressive spending through 2026 The largest technology companies in developed markets are spending money like it’s 1999. Literally. The sector’s CapEx-to-sales ratio has climbed to roughly 11-12%, the highest level since the dot-com era, driven almost entirely by a frantic race to build AI infrastructure. That figure represents a four-percentage-point jump from 2022, before ChatGPT turned the entire tech industry into an arms dealer for artificial intelligence. ## The numbers behind Big Tech’s construction binge The Magnificent Seven, that now-familiar cohort including Meta, Microsoft, Alphabet, and Amazon, are leading the charge. Their individual capex-to-revenue ratios are approaching or exceeding 20-35% as of late 2025. The five largest spenders are on track to collectively pour more than $600 billion into capital expenditures by 2026. Analysts project that Big Tech’s capex intensity could reach roughly 23% of revenue by 2025-2026, more than double what it was before the generative AI wave hit. The spending is concentrated in data centers, semiconductors, and the sprawling ecosystem of hardware and cooling infrastructure needed to train and run AI models. Some of these firms are even posting negative free cash flow for the first time in decades. ## A sector-wide transformation, not just a Big Tech story The IT sector now accounts for approximately 35% of total S&P 500 capital outlays, an unprecedented share. The comparison to the late 1990s is inevitable, and not entirely unfair. Back then, telecom and tech companies poured billions into fiber optic networks and server farms, much of which went underutilized for years. The difference this time is that today’s spenders are far more financially resilient. Corporate balance sheets are significantly stronger than they were during the dot-com boom, with lower leverage ratios and larger cash reserves providing a cushion against potential miscalculation. ## What this means for investors The bull case is simple. AI has demonstrated clear commercial potential across enterprise software, cloud computing, advertising, and consumer products. The $600 billion-plus spending projection for 2026 reflects genuine confidence that revenue will eventually catch up to investment. The bear case is equally straightforward. Capital-intensive business models compress margins, reduce free cash flow, and create enormous fixed-cost structures that become liabilities if demand disappoints. **Disclosure:** This article was edited by Editorial Team. For more information on how we create and review content, see our [Editorial Policy](https://cryptobriefing.com/editorial-policy/).