During earnings calls this week, tech companies raised their capital expenditures, or capex, projections. Google’s parent company, Alphabet, SAYS on Wednesday it plans to double capex by 2026 to nearly $185 billion. Amazon SAYS Thursday it plans to spend a whopping $200 billion on capex, ahead of Wall Street estimates. Last week, Meta SAYS full-year capex will rise to $135 billion. Those companies’ spending, along with Microsoft’s growing projections, totaled more than a staggering $630 billion.

And Big Tech is putting all its eggs in one basket: Not only are the dollars higher, but spending is more concentrated on one goal—scaling AI compute—rather than a mix of strategic bets.

The amount companies are spending on AI infrastructure now rivals some of the world’s largest economies and is comparable to the annual GDP of countries like Sweden and Israel. Capital expenditures fund major infrastructure items such as data centers, servers, and power systems that fuel the AI ​​build-out race. Those data centers—some are expected to be the size of a football field, or even four times the size of Central Park in Manhattan— require a lot of resources and energy to build, maintain, and operate.

“We’ve never invested in anything like this before,” Gil Luria, managing director and head of technology research at financial services firm DA Davidson, said. luck. “But we also haven’t had technology this promising before.”

Data centers in your shopping mall

As companies invest in physical data center infrastructure, some experts say that the next phase of construction may reach your city. “I firmly believe that the Stranger Things mall where they will fight the creature to be converted into a data center,” said Brent Thill, an analyst at investment banking firm Jefferies. luck.

The magnitude of today’s AI construction is unlike any other investment in history. However, Luria said, capex simply reflects current demand. “This is an unprecedented construction,” Luria said. “But it’s actually done in tandem with the growth in demand.” Luria pointed out that the backlog of demand for Amazon, Meta, and Microsoft has reached new heights. Microsoft’s backlog, or the accumulation of orders the company has accepted but not yet fulfilled, doubled to $625 million thanks to OpenAI.

Thill says the build is to address the AI ​​industry’s current bottleneck: physical infrastructure. He said the bottleneck has shifted from chips to energy, and now, it’s the physical shell that’s missing. “It comes from the lack of chip, lack of GPU,” Thill said. “Now, it’s a lack of physical shell.”

Market uncertainty and the software squeeze

But as companies pour money into AI infrastructure, it causes caution in software valuations, causing a big weekly sell-off in tech stocks and cryptocurrency as advances in AI cast doubt on the relevance of software technology. Although companies are bullish on AI’s potential, the technology has yet to pay off, and investors are reacting to uncertainty about its actual value. Coupled with weak jobs data, investor AI jitters prompted a write-off of nearly $1 trillion from software and services stocks. But not everyone is worried, including Nvidia CEO Jensen Huang, who has denied demand for short-term ROI.

However, investors in technology giants are increasingly nervous because these companies are essentially exhausting their available capital to finance infrastructure construction, according to Luria. He said shareholders want to see returns, not more investment. “‘We understand that you want to invest all of this money, but you’re investing all of our money; you’re taking all of your money and all of your cash flow and investing it,'” Luria said of shareholder thinking.

Despite sales, Big Tech is betting on high ROI from AI. “We’re in a jump game right now,” Thill said. “You have three to four major public sellers all lining up for this prize.”

As for why the construction started, Thill said that, given the current demand for AI data centers, the only concern of tech companies is the risk of not doing enough. Any excess construction will incur some compensation.

“Even if you overbuild,” Thill said, “there are a lot of people who will buy the overbuild even if they can’t sell it to their clients. Other people want to buy it: state, local government, (and) federal government.”