Diverse AI Spending Spurs Growth Beyond Tech Giants

Global AI spending is set to rise significantly, reaching USD 480 billion by 2026, with a wider distribution of investment beyond Microsoft, Amazon, Alphabet, and Meta. China's role is increasing, driven by low-cost models and government support, while Neocloud providers will capture a significant portion of the market.

Global spending on artificial intelligence (AI) is anticipated to soar in the forthcoming years, with UBS projecting a 60% year-on-year increase by 2025, amounting to USD 360 billion.

This momentum is expected to sustain through 2026, culminating in a further 33% rise to USD 480 billion. However, the proportion of spending attributed to the major four tech giants—Microsoft, Amazon, Alphabet, and Meta—is forecasted to decline, from 58% in 2025 to 52% in 2026. The report highlights a shift, predicting that AI spending will diversify as other players gain prominence, potentially stabilizing the market by reducing concentration among a few companies.

By 2025, AI spending outside the Big 4 is projected to reach USD 150 billion, with a considerable portion, 35%, coming from China. The surge in China's AI investments is fueled by low-cost models like DeepSeek and robust governmental support, complemented by the expanding usage of AI in sectors such as e-commerce, social media, and advertising. Neocloud providers, offering specialized AI-integrated cloud services, are emerging as significant contributors, expected to capture around 25% of non-Big 4 AI spending in 2025.

Furthermore, other hyperscalers and enterprise cloud providers, including Oracle and Softbank, are anticipated to account for the remaining investments. UBS suggests that while the Big 4 remain influential, expanded investment across diverse AI-focused companies is vital for the sector's sustained resilience.

(With inputs from agencies.)