Big Tech stocks have seen a rally due to an emerging trade truce with China and a favorable economic outlook, with the S&P 500 tech sector index increasing by 8.4% over the past week. Even Microsoft and Nvidia have posted gains despite facing challenges, with Nvidia’s market cap surpassing $3 trillion following news of the temporary ceasefire in the US-China trade war. Key players in Big Tech are significantly boosting their budgets for AI investments; Alphabet plans to spend $75 billion on AI and data center infrastructure, while Meta aims for $60-$65 billion. Microsoft commits to $80 billion by June to expand AI initiatives. The impact of tariffs on the costs of building AI infrastructure raises concerns, but companies continue to prioritize AI as essential for their business models. Reports suggest AI can improve productivity, but the labor market may experience shifts as job creation and destruction occur concurrently. The overarching theme indicates that Big Tech is aggressively investing in AI while navigating tariff-related challenges.

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