Big Tech plans $725B AI spend in 2026, but IBM warns revenue may not justify it.

Big Tech giants like Amazon, Alphabet, Microsoft, and Meta are set to spend $725 billion on AI infrastructure in 2026, a 77% increase from last year. IBM CEO Arvind Krishna cautions that the massive investment may not be supported by enough revenue growth, estimating that the required $1-2 trillion in annual AI-related revenue might not materialize. He also predicts only a few large AI companies will survive long-term due to commoditization and low switching costs. IBM itself is focusing on AI consulting and software rather than heavy infrastructure spending, betting on more sustainable returns amid the AI boom.