Washington – Brussels: Europe and the Arabs

A number of major technology companies have announced their results in recent weeks, but the most striking piece of information for Wall Street is the 2026 capital expenditure (CapEx) projections, which collectively exceed $700 billion (€590.3 billion). Most of this capital will be directed towards developing artificial intelligence (AI) infrastructure, products, and services, confirming the crucial shift that began last year when major technology companies spent an estimated $460 billion (€387 billion) on AI-related capital investments. According to Euronews, the European news network based in Brussels, Amazon leads the pyramid of planned spending for 2026, expecting to inject nearly $200 billion (€170 billion) into capital expenditures. For comparison, the company's spending plan is approaching the annual GDP of Greece. Alphabet, Google's parent company, comes in next with approximately $185 billion (€155 billion), while Meta and Microsoft are preparing to spend around $135 billion (€113 billion) and $105 billion (€88 billion), respectively. Oracle has raised its planned capital expenditure for 2026 to $50 billion (€42.1 billion), about $15 billion (€12.6 billion) higher than previous estimates, while Tesla intends to double its spending this year to around $20 billion (€16.8 billion). Apple is still lagging behind in terms of spending, with a budget expected to not exceed $13 billion (€10.9 billion), but the company announced last month a multi-year partnership with Google to integrate Gemini AI models into the next generation of the Apple Intelligence platform.

This partnership will specifically focus on rebuilding the Siri voice assistant and enhancing artificial intelligence capabilities on the devices themselves. This effectively means that Apple is outsourcing some of the necessary investments to maintain its competitiveness in the AI ​​development race. Nvidia, which will not announce its results and forecasts until later this month, typically does not spend on AI to the same extent as the cloud computing giants, Hyperscalers. Since its core business is selling graphics processing units (GPUs), Nvidia is expected to be the biggest beneficiary of a significant portion of the funds being invested by other major technology companies, particularly in equipping data centers. According to CEO Jensen Huang, the company's data center revenue is expected to reach $500 billion (€421.2 billion) by the end of 2026. The Major Shift in Capital Allocation

The massive spending spree planned by major technology companies for 2026 is generating mixed feelings on Wall Street; On the one hand, investors recognize the necessity and urgency of developing competitive advantages in the age of artificial intelligence. On the other hand, they are concerned about the sheer scale of the cost, especially since its financing relies on significant increases in borrowing and a rare suspension of share buyback programs. Historically, these companies were celebrated as cash-generating machines that returned substantial wealth to shareholders through share buybacks, but this model appears to be on the verge of collapse in the AI ​​era. Data from the last quarter of 2025 shows that aggregate buybacks in the technology sector plummeted by more than $12.5 billion (€10.5 billion), reaching their lowest level since 2018, as companies instead turn to debt markets. Morgan Stanley estimates that cloud computing giants will borrow nearly $400 billion (€335.7 billion) in 2026, more than double the $165 billion (€138.5 billion) they borrowed in 2025. This could push total issuance of high-rated US corporate bonds to a record $2.25 trillion (€1.88 trillion) this year.

Last November, Alex Hessel, an analyst at Rothschild & Co., was one of the few dissenting voices when he downgraded both Amazon and Microsoft. In a note to clients, he wrote that "investors are acting as if they are evaluating Amazon and Microsoft's capital expenditure plans based on the assumption that cloud-1.0 economics are still valid," referring to the low-cost structure of cloud computing services that allowed major technology companies to flourish over the past decade. But he warned that "there are several problems that suggest the AI ​​boom won't unfold as planned, and that its cost is likely much higher than investors realize." The concerns expressed by Hessel are likely to resonate with more analysts as AI-related capital expenditure balloons to significantly higher levels by 2026, given that the race among major tech companies to develop AI is currently fueled by massive amounts of debt. Whether this strategy will pay off, and which companies will ultimately emerge victorious or lose out, remains to be seen.  

Europe’s Industrial Deficit

Amid this frantic race to spend, pressing questions arise about Europe’s ability to compete in a battle now largely fought on balance sheets. For the European Union, the transatlantic comparison is stark: while US tech companies mobilize nearly €600 billion in a single year, coordinated efforts within the EU struggle to match the financial might of even a single US giant. Brussels has attempted to respond with the AI ​​Factories initiative and the AI ​​Continent plan, launched in April 2025, aimed at mobilizing joint public-private investments. However, the figures tell a harsher story; total European spending on sovereign cloud infrastructure is projected to reach only €11.5 billion in 2026. While this represents a respectable 83% year-on-year increase, it remains marginal compared to the scale of US investments. Arthur Mensch, CEO of the French AI company Mistral, stated last year that "American companies are building the equivalent of a new Apollo program every year," adding that "Europe is regulating excellently with AI law, but computing power superiority cannot be achieved through regulation alone." Mistral represents one of the few exceptions in the European AI race; the French company is pursuing a strategy similar to its American counterparts by aggressively expanding its physical presence. Following a €1.7 billion funding round in late 2025, notably backed by semiconductor giant ASML, Mistral announced a €1 billion capital expenditure plan for 2026, confirming this week the start of construction on a major data center in Borlänge, Sweden. This move is pivotal for Mistral as it marks its first major infrastructure investment outside France and carries significant implications for European sovereignty. In partnership with Swedish data center operator Eco Data Center, some €1.2 billion will be invested to build a facility designed to provide "sovereign computing power" compliant with the EU's stringent data standards and powered by Sweden's abundant green energy. Meanwhile, US tech giants are attempting to appease European regulators with "sovereign-light" solutions, launching several major local cloud projects, for example in Germany and Portugal, pledging to ensure data remains within national borders. However, critics argue that these solutions remain technically dependent on US parent companies, leaving the European industry vulnerable to the vagaries of the American economy and politics. As 2026 approaches, the stakes for both sides are clear: the US is staked almost everything, including its credit rating, on consolidating its dominance in artificial intelligence, while Europe, cautious and constrained by capital, hopes that targeted investments and robust regulation will be enough to carve out a sovereign space in a world increasingly dominated by American technology.