Hyperscalers plan $760B in AI spending this year, up 84%. But 15 states have proposed data center bans, and 71% of Americans oppose local construction. The tension between investment and pushback defines the risk for tech investors.
The four largest hyperscalers – Meta, Microsoft, Amazon, and Alphabet – plan to spend $760 billion on AI-related capital expenditures in 2026. That is an 84% jump from the $413 billion they spent last year, according to a note from Sidoxia Capital Management.
Local opposition is intensifying. A Gallup survey cited in the note found 71% of Americans oppose data center construction in their communities. Fifteen states have enacted or proposed moratoriums or bans on new data centers.
July was a choppy month for tech stocks. The Nasdaq fell 3.2%. The Magnificent Seven-heavy QQQ index dropped 6.6%. The S&P 500 slipped 0.1%, while the Dow rose 0.3%. The sell-off came as Middle East tensions escalated and Chinese AI competition surged. Moonshot released the Kimi K3 model. Chipmaker CXMT went public near a $500 billion valuation, the largest IPO on mainland China.
Despite the political friction, the spending is backed by record customer commitments. Microsoft, Google, and Amazon together carry roughly $1.4 trillion in remaining performance obligations – orders booked but not yet fulfilled, Sidoxia said. The firm argued that such backlogs show enterprise customers see real economic returns from AI.
“If AI technology lacked real-world utility or failed to generate economic returns, enterprise customers would not be locking in massive orders in multi-year forward commitments,” the note said.
Headcount growth at the hyperscalers remains subdued even as revenue surges. Sidoxia called that proof that internal AI deployment is improving operating leverage.
To win over reluctant municipalities, hyperscalers are offering community benefit agreements that include grid investments and environmental commitments. Doug Sims, managing director at Green Finance & Economic Development, said in the note that hyperscalers are funding “investments in weatherization, home repairs, heat pumps, distributed solar and storage, and demand-management technologies.” Such initiatives lower peak energy demand and reduce household costs, he said, while helping secure local permits.
The four hyperscalers each carry AlphaScala Alpha Scores that reflect their overall investment quality. GOOGL stock page scores 76, classified as Strong. MSFT stock page scores 70 and AMZN stock page scores 67, both Moderate.
Sidoxia Capital Management said it holds positions in AMZN, GOOGL, META, and MSFT. The note was published as part of its complimentary monthly newsletter.
The firm said that even if political maneuvering or regulatory friction slows data center construction in certain jurisdictions, it will simply extend the runway of the infrastructure super-cycle rather than trigger a boom-and-bust collapse.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.