Global AI spending to increase by 60% in 2025; share of Microsoft, Amazon, Alphabet & Meta to decrease: UBS
The momentum is expected to continue in 2026, with a further 33 per cent rise to USD 480 billion.
However, the share of spending attributed to the Big 4 tech giants -- Microsoft, Amazon, Alphabet, and Meta -- is anticipated to decline, falling from 58 per cent in 2025 to 52 per cent in 2026.
The report said 'we expect global AI spend to increase by 60 per cent y/y in 2025 to reach USD 360bn and 33 per cent in 2026 to reach USD 480bn...We expect the combined share of these companies as a percentage of AI spend to rise from less than 20 per cent in 2023 to more than 40 per cent in 2025'.
It also highlighted that this broadening of AI spending across a more diverse set of players is a healthy development for the overall AI theme. A reduced concentration of investment among a few companies could eventually lead to less volatility in the market, the report said.
Spending outside the Big 4 is expected to reach a robust USD 150 billion in 2025. A significant portion of this is projected to come from China, which is likely to account for 35 per cent of the total spend outside the Big 4.
According to UBS, the rise in China's AI investments is being driven by the success of low-cost models such as DeepSeek, strong government support, and the growing use of AI in consumer-facing applications like e-commerce, social media, and advertising.
The report mentioned that the Neocloud providers--companies offering specialized AI-integrated cloud services--are also emerging as a key segment, expected to capture around 25 per cent of the non-Big 4 AI spending in 2025.
The remaining spend is likely to come from other hyperscalers and enterprise or sovereign cloud providers, including players such as Oracle and Softbank.
While UBS advises investors to continue monitoring guidance from the Big 4, the report emphasizes that other AI-focused companies are now accelerating their investments and are crucial to the ongoing resilience of the sector. (ANI)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
Industrial Output Growth Slows to 10-mth Low in June
ANI Representational image Our BureauNew Delhi: India's industrial output growth slowed to a 10-month low at 1.5% in June, pulled down by contraction in mining and electricity sectors and subdued performance by the manufacturing sector, official data showed Monday. The Index of Industrial Production (IIP) expanded 1.9% in May and 4.7% in June 2024. "Excess rains in the second half of June 2025 are likely to have weighed on mining output, while also leading to a contraction in electricity generation, although the extent of the same narrowed compared to the previous month," said Aditi Nayar, chief economist at ratings firm ICRA. Among the three major sectors, only manufacturing grew in June, by 3.9%. Production shrank 8.7% in mining and 2.6% in electricity. "A marginal pickup in the manufacturing sector growth was more than offset by contraction in both the mining and electricity sector output," said Rajani Sinha, chief economist at CareEdge IIP growth dropped to 2% in the first quarter of the current fiscal year from 5.4% a year estimates industrial GVA (gross value added) growth to have decelerated in the first quarter ended GVA growth was 6.8% in the January-March quarter. Official figures for the June quarter will be released in the manufacturing sector, 15 of the 23 industry groups recorded growth in terms of use-based classification, two out of the six categories recorded a contraction: primary goods (3%) and consumer non-durables (0.4%)."The contraction in primary goods output reflects the weaker performance of mining," noted the positive side, infrastructure/construction goods led growth with a 7.2% increase."While private capex is yet to show meaningful traction, public capex continues to remain encouraging. However, persistent global uncertainties are weighing on the overall investment sentiment," said Sinha.
Time of India
3 hours ago
- Time of India
Currency watch: Rupee ends 18 paise lower at 86.70 against dollar; trade jitters and Fed uncertainty weigh on sentiment
The rupee gave up early gains and settled 18 paise lower at 86.70 against the US dollar on Monday, pressured by persistent month-end dollar demand from importers and caution ahead of key trade and monetary policy decisions. Tired of too many ads? go ad free now After opening at 86.47 at the interbank foreign exchange, the domestic unit briefly strengthened to an intra-day high of 86.40 before slipping to the day's low of 86.70, where it eventually settled. On Friday, the rupee had closed at 86.52, PTI reported. Traders attributed the rupee's weakness to broad dollar strength following the EU-US trade pact and lingering uncertainty over India's own trade talks with the US ahead of the August 1 deadline. 'The Indian rupee has depreciated against the US dollar, mirroring the trend of most Asian currencies. This weakening is largely attributed to the strengthening dollar, which gained momentum following the recent EU-US trade deal,' said Dilip Parmar, Research Analyst at HDFC Securities. Parmar added that the spot USD-INR pair may find support at 86.10 and resistance at 86.75 in the near term. The dollar index rose 0.54% to 98.17, while Brent crude climbed 0.85% to $69.02 per barrel amid optimism that the EU-US deal could support future energy demand. In equities, the BSE Sensex dropped 572.07 points (0.70%) to 80,891.02 and the Nifty fell 156.10 points (0.63%) to 24,680.90. Foreign investors net sold shares worth Rs 6,082.47 crore, according to exchange data. 'Rupee is trading with a slight negative bias amid uncertainty ahead of the August 1 trade deal deadline,' said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan. 'Month-end dollar demand from importers may also weigh on the domestic currency. Tired of too many ads? go ad free now USD-INR spot price is expected to trade in a range of Rs 86.35 to Rs 86.90.' He added that investor caution ahead of the upcoming monetary policy meetings of the US Federal Reserve and the Bank of Japan will also keep pressure on the rupee. Meanwhile, weak domestic data added to market nervousness. India's industrial output grew just 1.5% in June, the slowest pace in 10 months, hit by poor performance in mining and power sectors due to excess rains. India's forex reserves also declined by $1.183 billion to $695.489 billion in the week ended July 18, RBI data showed. Reserves had reached an all-time high of $704.885 billion in September 2024.
Mint
3 hours ago
- Mint
China rare earth ban to impact domestic production, exports across 5 sectors in India: SBI economists
Mumbai:China's ban on rare earth trade will impact domestic production and exports across five sectors in India, economists at SBI said on Monday. A report by the economists pegged the overall imports of rare earths and compounds at USD 31.9 million and magnet imports at USD 291 million in FY25. Volumes of India's consumption of rare earths and compounds has seen a rising trend, it said, adding that import of rare earth magnets by India increased sharply in FY25. "China dominates in India's direction of trade in rare earth minerals and compounds," it said, listing out priorities India needs to adopt. "The top sectors impacted by China's ban include transport equipment, basic metals, machinery, construction and electrical and electronics. Both domestic production and exports will be impacted," it added. It added that Indian financial institutions, including banks, are also at risk of some impact because of this. The SBI report recommended states to take additional steps to ensure better exploration of such resources, which can reduce dependency on imports. It also cited a ₹ 8,000-crore scheme by the government of Odisha as a case in point, and specified about efforts to search for minerals in the Ganjam district.
