Big tech’s webscale buildout keeps breaking records. In 1Q25, the 22 companies in our Webscale Tracker, including new entrant CoreWeave, generated $652 billion (B) in revenue (+9.2% YoY), spent $97B on capex (+67.2%), poured $84B into R&D (+12.2%), and held $635B in cash (-3.6%) against $560B in debt (+1.3%). Net PP&E surged 32.9% YoY to nearly $1 trillion. Headcount hit 4.17M, flat YoY. 🔹 Revenue: Growth Concentrated in the Big Four 1Q25 revenue hit $651.6B (+9.2% YoY), pushing annualized sales to $2.65T. Coreweave and Yandex posted the fastest growth, but the heavy lifting came from Alphabet (annualized revenues up 13.1% vs. 2Q23-2Q24), Amazon (+10.1%), Meta (+19.4%), and Microsoft (+14.1%). Amazon added the most dollars: up $12.4B YoY to $155.7B (+8.6%). At the other end: Fujitsu’s revenue dropped 18.7% as it retreats from cloud and data center services. Baidu, eBay, and IBM posted sub-2% growth. 🔹 Capex: AI Hype Sends Spending Soaring Capex skyrocketed 67.2% YoY in 1Q25 to $96.6B, annualizing to $343B, up 65% from a year ago and setting another all-time high. The AI frenzy, sparked by ChatGPT and fanned by investors, is now a dominant force. GPU spend is through the roof. US webscalers are spending like the proverbial drunken sailor, fueled by subsidies and hype, and enabled by what many view is widespread intellectual property theft. Top 1Q25 capex outlays came from Amazon ($25.0B), Alphabet ($17.2B), Microsoft ($16.7B), and Meta ($12.9B. Together, that is 74% of the total. Notably, 58% of annualized capex was for IT/network/software infrastructure (vs. 55% in 1Q24, 49% in 1Q23), showing a focus on retrofitting existing data centers for AI. 🔹 Profitability: Margins Under Pressure from Capex Free cash flow margins dipped to 15.2% in 1Q25 (annualized), down from 18.9% a year earlier. Net profit margins averaged a healthy 20.7% over the last four quarters. Alphabet led with $34.5B in net income (+46% YoY), a political liability as antitrust scrutiny intensifies. Meta, Microsoft, Tencent, and Apple topped the FCF leaderboard. Amazon and Alibaba were mid-tier, while HPE and Baidu brought up the rear. Debt vs. cash positions remain solid overall, but some players (Apple, Oracle, IBM, Coreweave) are deeply leveraged and vulnerable if the AI bubble bursts. 🔹 Employment: Flat Growth, Automation Looms Webscale employment hit 4.17M, up just 0.2% YoY. Alibaba’s 39% headcount drop (via Sun Art divestment) offset growth elsewhere. Despite massive AI investment, workforce growth has plateaued since 2021. Automation and robotics are gaining ground, especially in logistics. We expect modest headcount gains in 2025, then a steady decline. 🔹 Regional Trends: Asia Rebounds Asia-Pacific’s drag is easing: regional revenue grew 7% YoY in 1Q25, narrowing the gap with global growth (+9%). The Americas, Europe, and MEA remain in the low double-digit range. With strong government backing, Tencent and Alibaba are poised to accelerate Asia’s momentum through 2026.