Platformonomics TGIF is a weekly roll-up of links, comments on those links, and perhaps a little too much tugging on my favorite threads.
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The wussies on Wall Street are not so enthused about the CAPEX numbers and guidance for next year. But what they call “unsettling” we call a good start.
FULL 2025 CAPEX RETROSPECTIVE COMING NEXT WEEK!!!
News
HyperCAPEX – Q4 2025
There is CAPEX, and there is HyperCAPEX.
The four hyperCAPEX companies spent $128 billion on CAPEX in Q4, up 12% from Q3 and up 65% from a year ago.
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Amazon CAPEX – Q4 2025
Corporate CAPEX in Q4 was $40.47 billion, up 12% from Q3 and 61% from a year ago (including finance leases). Total CAPEX for 2025 was $134.74 billion (including finance leases).
AWS CAPEX was $31.7 billion for the quarter (including finance leases), up 12% from Q3 and 55% from last year, so about 78% of the company’s overall CAPEX (turns out they also have a little retail business with warehouses and trucks and stuff).
AWS CAPEX for all of 2025 was $96.5 billion, 68% of the company’s overall CAPEX spend.
Back to the future for Amazon as they get back to viewing every penny of free cash flow as a horrible mistake.
Comments of note:
We expect to invest about $200 billion in capital expenditures across Amazon.com, Inc., but predominantly in AWS, because we have very high demand.
In 2025, AWS added more data center capacity than any other company in the world.
It certainly has a headwind from the investments in AI and the depreciation on that CapEx.
you’re gonna keep seeing all the inference services, which is gonna be the majority of the long-term AI workloads is gonna be inference. You’re gonna see the inference keep getting optimized. You’re going to see higher utilization on those services.
in the last twelve months, we added 3.99 gigawatts of power. Just for perspective, that’s twice what we had in 2022 when we were in $80 billion annual run rate business. We expect to double it again by the ’27. We added 1.2 gigawatts of power in Q4 just quarter over quarter.
2025 operating cash flow (i.e. before CAPEX) $139.5B
2026 CAPEX forecast: $200B
🤔
Google CAPEX – Q4 2025
CAPEX in Q4 was $27.85 billion for the quarter, up 16% from Q3 and 62% from a year ago. Total CAPEX for 2025 was $91.45 billion.
CapEx was $27.9 billion for the fourth quarter, and $91.4 billion for the full year, in line with our expectation. The vast majority of our CapEx was invested in technical infrastructure, with approximately 60% of that investment in servers and 40% in data centers and networking equipment.
Guidance for 2026:
For the full year 2026, we expect CapEx to be in the range of $175 billion to $185 billion, with investments ramping over the course of the year.
In 2025, depreciation increased by nearly $6 billion, or 38%, from $15.3 billion in 2024, to $21.1 billion in 2025. Given the increase in our CapEx investments in recent years, we expect the growth rate in 2026 depreciation to accelerate in Q1, and meaningfully increase for the full year.
Other interesting comments:
we’ve been supply-constrained, even as we’ve been ramping up our capacity. Obviously, our CapEx spend this year is an eye towards the future; and you have to keep in mind some of the time horizons are increasing in the supply chain
But I think specifically at this moment, maybe the top question is definitely around compute capacity, all the constraints, be it power, land, supply chain constraints, how you ramp up to meet this extraordinary demand for this moment.
Approximately 60% of our investment in 2025, and it’s going to be fairly similar in 2026, went towards machines; so, the servers. And then 40% is what you would refer to as long duration assets, which is our data centers and networking equipment.
I think you’re probably referring to the depreciation delta between them, those long-term duration assets depreciate over — the building could be 40 years or longer. Other components may be less than that.
Another important component is how we allocate this CapEx, and we’ve commented in the past about the allocation of our ML compute across the business. And for 2026, just over half of our ML compute is expected to go towards the Cloud business.
2025 operating cash flow: $164.7 billion
2026 CAPEX forecast: $175 to 185 billion
🤔
Cloud Growth Rates – Q4 2025
Amazon and Google acccelerate, Microsoft flat.
Washington Post Layoffs? Blame the New York Times, Not Jeff Bezos
I’ve argued the New York Times is becoming the thing it most likes to rail about: a digital, winner-take-all business. Others are noticing.
The Times is a crossword and chocolate chip cookie recipe empire that subsidizes a news operation on the side (same model as Bloomberg).
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Putting the Seattle Times on Notice
Washingtonians have long supported their local press. It’s a core value in the state, and part of its fierce commitment to robust democracy, open government and accountability.
Legislators need to hear this again and again, and Thursday is the next big opportunity.
The Senate Ways & Means Committee will take testimony, in writing and in person, on a proposed lifeline to local news outlets across the state.
That lifeline is Senate Bill 5400. The measure would add a tax surcharge on large search engines and social media platforms, reflecting a small portion of the value they derive from trustworthy news content.
This would raise around $24 million that will be distributed annually to newspapers, broadcasters and websites producing local journalism.
Speaking of media roadkill, the Seattle Times is a stalwart promoter of “journalism”. We can debate to what degree they are actually a practitioner. But they’re still lobbying the government to make Google and Meta pay them to exist in hopes of bringing back their mid 20th century glory days.
Attempts to make make themselves a government ward at the Federal level have failed, so now they’re pushing it at the state level. This is a shameless, rent-seeking effort. It is terrible for the journalism they claim to exalt, and is based on a completely duplicitous premise. If they really believe their own logic, they should be asking the New York Times — who likely have more customers in Seattle than they do — to subsidize them (see above).
If The Seattle Times gets any traction on this effort, I will make them my public enemy number one (much to the relief of private equity).
Quick Hits
Here we relegate 1.) punchlines you can write yourself 2.) topics I’ve beaten to death and/or 3.) succinct interludes.
- Some are renaming SaaSmageddon to SaaSpocalyse. I was not consulted on this decision. But Stratechery is on team SaaSmageddon.
- Database vampire: they’re taking the dilution (because they don’t have the money)
- Database vampire: wants you to know things you weren’t wondering about until they mentioned it
- Fractional CEO Elon Musk is becoming less fractional
- I was beaten to dubbing it Space Twitter
- The great Matt Levine on Space Twitter (two links there)
- UnfocusedAI: OpenAI Is Hiring Hundreds of AI Consultants to Boost Enterprise Sales
- Tim O’Brien points tech companies to the Howard Hughes playbook for enduring (and prevailing in) theatrical Congressional hearings/browbeatings.
- Inside the German Mind: nuclear power plants BAD, nuclear weapons GOOD ¯\_(ツ)_/¯
- SemiAnalysis muses philosophically about what society should expect from a data center. They must have a new social media person, though I like this person too.
- The enduring cultural legacy of SkiFree