Bank of America Securities expects hyperscaler capital expenditures to grow 34% year-over-year to $257 billion in 2025, driven by increasing demand for data centers and AI infrastructure.

The prediction emphasizes the rising investments by big cloud companies within capacity limitations and rising artificial intelligence acceptance. Citing chip supply difficulties that have hampered data center construction, Amazon (AMZN, Financials) CEO Andy Jassy characterized AI capacity demand as "insatiable."

Reportedly contemplating a $35 billion fundraising round with Apollo Global to develop U.S. data centers is Meta Platforms (META, Financials). Plans for investments between $60 billion and $65 billion in artificial intelligence infrastructure have been presented by CEO Mark Zuckerberg.

Microsoft (MSFT, Financials) intends to spend $80 billion on AI data centers next year; Amazon and Alphabet (GOOG, Financials) have pledged $100 billion and $75 billion, respectively, thereby highlighting the forceful drive by tech companies to increase cloud and AI capabilities.

Developed in two months for about $6 million, DeepSeek's R1 model has changed the AI scene. Although the model's cost-effectiveness is impressive, experts disagree on the real charges related to its simple construction.

BofA said that well-positioned companies would continue to prioritize high-impact AI activities, while others may reconsider their AI strategies due to the development's iterative nature.

Further demand is predicted to be unlocked by declining AI prices, therefore supporting the long-term projection for cloud and AI infrastructure expenditure.