Big Tech Is Spending Hundreds of Billions on AI. So Far, Almost Nobody Is Making Money From It
Google, Meta, Microsoft and Amazon all reported their latest financial results this week. The picture is complicated: enormous AI spending, thin returns, but millions of new users and a few signs the bets might pay off.
Key points
- Alphabet, Google's parent company, recorded negative free cash flow for the first time in its public history, on revenue of $118 billion.
- Meta's Reality Labs division, responsible for its AI work, lost nearly $9 billion in the first half of 2025.
- Amazon plans to spend $220 billion on AI in 2025, yet strong performance in other businesses pushed its stock to a two-month high.
- Google's Gemini chatbot reached 950 million monthly users, three times its user count from a year earlier.
- Apple's outgoing chief executive Tim Cook confirmed plans to charge users for heavy use of a revamped, AI-powered Siri.
The biggest technology companies on earth are burning through cash to build AI. Right now, most of them are losing the race against their own spending.
Free cash flow, the money a business has left after paying for its operations and investments, is the clearest sign of financial health. Google's parent company Alphabet spent so much building AI infrastructure that its free cash flow turned negative for the first time since the company went public. Meta's free cash was just $784 million on $61 billion of revenue, meaning it kept less than two cents of every dollar it brought in.
Is anyone actually making money from AI?
Microsoft is the clearest yes. Shares jumped to a six-month high after it showed strong revenue growth and rising adoption of its core AI tools, even while planning to match the $190 billion it spent on AI over the last twelve months. Tracy Woo, an analyst at research firm Forrester, said Microsoft was demonstrating that its massive AI investments were "beginning to deliver returns."
Amazon told a similar story. Plans to spend $220 billion on AI this year did not rattle investors, because the company's other businesses, particularly its cloud computing and retail arms, are growing fast enough to absorb the cost.
Meta and Google face more pressure. Wall Street punished Meta's stock after chief executive Mark Zuckerberg announced plans for an AI agent, software that can carry out tasks on your behalf without constant instructions, and a business unit to sell AI tools to other companies. Neither product exists yet, and Zuckerberg offered no timeline. Investors were not impressed.
| Company | Planned AI spend (2025) | Key metric |
|---|---|---|
| Alphabet (Google) | Not stated | Negative free cash flow on $118bn revenue |
| Meta | $140bn+ | Free cash flow of $784m on $61bn revenue |
| Microsoft | ~$190bn | Stock at 6-month high |
| Amazon | $220bn | Stock at 2-month high |
What does this mean for ordinary people?
For most consumers, the immediate news is about Siri. Apple said sales of its iPhone, Mac and iPad are running ahead of expectations, partly on anticipation of a revamped Siri that will use Google's Gemini chatbot, an AI assistant, as its engine. The company admitted it cannot get enough chips, the specialised pieces of hardware that power AI, to meet demand.
Apple's Tim Cook was blunt about one thing: heavier use of the new Siri will cost extra. A paid tier is coming. Cook described user enthusiasm as "off-the-charts" based on testing, and said, simply, "We do believe there will be people who want to use it, a lot."
Google's Gemini chatbot already has 950 million monthly users, triple the figure from a year ago, as first reported by BBC Technology. That kind of growth tells you people are curious. Whether they will pay enough to justify the spending is the question nobody can quite answer yet.
