In the first quarter of 2025, big tech firms, including a newcomer, CoreWeave, have set new records in revenue and capital expenditures fueled by AI trends. Revenue reached $652 billion, marking a 9.2% year-over-year growth, while capital expenditures skyrocketed by 67.2%. Even with increased spending, employment remained flat at around 4.17 million. Key players such as Alphabet, Amazon, Meta, and Microsoft showed significant growth, with a regional revenue rebound in Asia.

Revenue growth was particularly driven by the 'Big Four'—Alphabet, Amazon, Meta, and Microsoft. Amazon added the most revenue dollars, rising by $12.4 billion from the previous year. Despite this strong performance, companies like Fujitsu, Baidu, eBay, and IBM lagged behind, posting minimal or negative growth.

The capital expenditure surge, influenced by AI developments and investor interest, pushed annual spending projections to $343 billion. The top contributors to this spending were Amazon, Alphabet, Microsoft, and Meta, accounting for 74% of total capex. This reflects a significant focus on upgrading existing data centers for AI capabilities.

Profit margins have been pressured by the increased capital expenditures. Free cash flow margins fell to 15.2%, down from the previous year's 18.9%. Notable profit performers included Alphabet, with substantial profits despite growing antitrust scrutiny. Debt positions are generally stable, though some companies are heavily leveraged, which could pose risks if the AI market falters.

Employment in the webscale sector has plateaued since 2021, with automation and robotics beginning to take precedence, especially within logistics. While modest headcount increases are expected in 2025, a trend of steady decline is anticipated thereafter.

In regional developments, Asia-Pacific is showing signs of economic recovery, with revenue growth of 7% year-over-year. Meanwhile, the Americas, Europe, and MEA continue to experience low double-digit growth. Tencent and Alibaba are positioned to drive regional momentum with considerable government support.