Microsoft, Meta burn $200B a year on AI hype while outspending Boeing, Exxon and Intel combined

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Meta and Microsoft just blew out earnings. But look past the headlines. Meta posted $47.5B in Q2 revenue, up 36%, and beat EPS by over $1.25. Microsoft hit $76.4B, up 18%, with a 24% profit beat. Cloud is booming. Azure grew 34%. AI is the story. But the bill is coming due.

Microsoft spent $24.2B on capex last quarter. It’s guiding $30B for Q3. That’s a $120B annual burn to build infrastructure. Meta raised full-year capex to as much as $72B. Zuckerberg called it a “multi-year investment cycle” while Reality Labs torched $4.5B in three months. Neither company is seeing clear AI profit returns yet.

“AI is a once-in-a-generation platform shift. But it’s going to take time to monetize,” Meta CFO Susan Li said.
https://www.wsj.com/tech/ai/meta-and-microsoft-double-down-on-ai-spending-as-investors-get-more-selective-ecba3276

Microsoft CFO Amy Hood told investors, “We do expect capital expenditures to increase materially in Q3.”
https://www.cnbc.com/2025/07/30/microsoft-msft-q4-earnings-report-2025.html

Investors cheered the growth numbers but are watching margins quietly contract. If AI ROI doesn’t clear double digits soon, Meta faces real balance sheet strain. Microsoft can weather more pain, but its upside thins fast. Both are piling on fixed costs and betting the farm that monetization will arrive before markets run out of patience.

And a buried red flag slipped past almost everyone:
If OpenAI is doing so well, why did Microsoft report losses on its equity investment in OpenAI?
It’s right there in the 10-K — a small contradiction, carefully tucked into the fine print.