Big Tech says AI is paying off. Should we believe them?

Today, we’re going to talk about the wild economics of AI from billion-dollar compute bills to the arrival of ads in your chatbot and more.

In today’s post:

• Big Tech’s AI bills are massive. Investors aren’t blinking.

• Ads are coming to your AI conversations

• Apple’s AI ambitions just got louder

• Trending AI tools + Best resource to learn and build business with AI

What’s Trending Today

Profits

AI is finally justifying the hype and the spend.

Microsoft, Meta, Alphabet, and Amazon are burning billions on AI. The surprise? The payoff is starting to look worth it.

Here’s everything you need to know:

• Microsoft is set to spend $30 billion this quarter alone, chasing AI growth through Azure and Copilot.

• Meta jumped 11% in one day, adding $200 billion in value after reassuring investors it can fund AI ambitions with ad dollars.

• Google raised its 2025 capex forecast by $10 billion to $85 billion and no one flinched.

• Investors are no longer asking if AI will pay off. They're watching who’s pulling ahead.

• Azure crossed $75 billion in annual sales, with over 100 million Copilot users, finally putting numbers behind the buzz.

• Even with Amazon’s cloud hiccup, the market’s message is clear: AI infrastructure isn’t just expensive, it’s essential.

• The Magnificent Seven may be trailing the S&P 500, but results like these reset the scoreboard.

Here’s what I think…

The AI race is no longer about moonshots or hype cycles. It’s about execution. The companies willing to spend (a lot) and ship (fast) are turning AI into a real business driver. As long as core revenues hold, Wall Street seems happy to foot the bill.

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Update

Amazon wants Alexa+ to talk and sell

Amazon’s AI ambitions just took a bold and controversial turn. CEO Andy Jassy says Alexa+ will soon deliver ads mid-conversation.

Here’s everything you need to know:

• Jassy revealed Amazon plans to insert ads into Alexa+ chat interactions as a new revenue stream.

• The goal: monetize Alexa+ conversations through product discovery and ad-based shopping prompts.

• Alexa+ is now free for Prime users and $20/month standalone, but more tiers including ad-free are likely.

• Amazon’s Q2 ad revenue rose 22%, and Jassy sees conversational ads as a key growth lever.

• But early reviews of Alexa+ have been mixed, and AI hallucinations raise risks of inaccurate product pitches.

• The privacy angle is murky: chatbot-style AIs collect more user data, which may unsettle customers.

• With AI infra spending up 90% YoY to $31.4B, Amazon needs new monetization paths fast.

Putting ads in AI chats is risky but Amazon isn’t playing it safe anymore. If Alexa+ can balance utility with subtle monetization, it could reshape how voice assistants drive commerce. If not, it might just talk itself into a backlash.

Strategy

Tim Cook says Apple is ready to buy its way into AI

Apple’s Q3 earnings beat expectations but that wasn’t the real story. It’s what Tim Cook said after the call that’s making headlines.

Here’s everything you need to know:

• Cook confirmed Apple is “open” to AI acquisitions as it ramps internal investment.

• The company is reallocating talent and quietly building its own LLM-powered Siri.

• Apple has reportedly held talks to acquire Perplexity and partner with OpenAI or Anthropic.

• Despite delays, Apple says “big AI features” are still on the roadmap just not quite ready yet.

• Meanwhile, the iPhone business is booming, up 13% year-over-year to $44.6 billion.

• Mac and services revenue also grew sharply, giving Apple financial room to chase AI.

• Tariff threats loom, but the company’s production shift to India shows long-term planning.

Apple doesn’t rush and that’s part of its brand. But in AI, waiting too long means playing permanent catch-up. Cook’s comments suggest Apple now sees AI not as a feature but as a foundation. If it can’t build fast enough, it might just buy the pieces.

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