Hyperscaler CapEx jumps to $127B in Q2

A new Synergy Research Group report revealed that hyperscaler infrastructure builds are focused on high-growth markets.

Sept. 23, 2025

3 min read

Key Highlights

Hyperscale CapEx increased by 72% in Q2 2025, reaching $127 billion, driven by AI infrastructure needs.
Data centers constitute the largest portion of hyperscale investments, reflecting a focus on expanding capacity for AI and cloud services.
Hyperscaler revenues from cloud services have doubled since 2021, with AI-related revenues growing over 150% year-on-year.
The total number of hyperscale data centers exceeds 1,200, with an additional 527 planned, supporting rapid growth in digital services.
Despite high investment levels, hyperscalers maintain CapEx as a percentage of revenue, similar to traditional telcos, indicating sustainable growth.

Abstract trading chart with big data and infographics.

It’s hard not to miss the new investments going into hyperscaler providers, a trend being driven by enterprise needs and the ongoing adoption of AI.

A new Synergy Research report revealed that hyperscale operator capex reached $127 billion in the second quarter, up 72% from the second quarter of 2024.

The research firm said this “has not been a temporary blip.”

In comparing the last four quarters with the preceding four quarters, CapEx growth was again 72%. Data centers account for the largest piece of CapEx, and building AI infrastructure has caused hyperscale operator CapEx to “balloon.”

Hyperscaler CapEx boom

Synergy notes that these ongoing investments reflect the fact that hyperscale company revenues in the second quarter totaled $720 billion, and over the last sixteen quarters, year-on-year revenue growth has averaged 10%.

“Hyperscale company spending on infrastructure has grown dramatically and continues to rise,” said John Dinsdale, a chief analyst at Synergy Research Group. “However, the companies making those investments are titanic in nature and they are focused on markets that will continue to grow rapidly over the coming years, as shown by our forecasts.”

Hyperscaler CapEx continues to grow, with data centers accounting for the largest piece of the spending pie.

He added that while hyperscaler CapEx was at under 9% of revenues, it has grown to over 16% in just the first half of 2025, “which “represents a huge growth in investments, but it isn’t out of the ordinary for infrastructure–heavy industries.”

A similar situation exists in the traditional telco space. While telcos worldwide are seeing slow revenue growth, CapEx spending remained in the 16-18% range.

Dinsdale said that these factors “suggest hyperscalers can comfortably accommodate the increased spending on AI infrastructure."

Cloud services drive

A big factor in hyperscale operator revenues is the advent of cloud-based services.

IaaS, PaaS, SaaS, social media, and search – reached $301 billion in the second quarter, having doubled from the first quarter of 2021.

During the last eight quarters, which Synergy calls the GenAI period, year-on-year revenue growth from those key digital services has averaged 18%.

The research firm estimates that GenAI technology is driving an incremental $50 billion in quarterly revenues for hyperscalers, “over and above the growth that those services were already enjoying.”

However, the $50 billion number is rapidly rising. GenAI-specific IaaS and PaaS service revenues, for example, are currently growing by over 150% year-on-year.

Supporting AI-based services

A big focus for hyperscale CapEX will be to accommodate the growth of AI-oriented services.

Synergy pointed to its analysis and tracking data through covering 20 of the world’s major cloud and internet service firms, which account for the bulk of IT service revenues, spending on IT hardware, and data center capacity.

This group of companies accounts for the bulk of IT service revenues, spending on IT hardware, and data center capacity.

Together, these providers now have 1,244 hyperscale data centers in operation worldwide. But according to Synergy, there are another 527 in the research firm’s known future pipeline.

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