“An increase in AI capacity is driving substantially all of our capital expenditure growth in 2023.”

In context

“tional data center capacity will provide us greater flexibility with the types of servers we purchase and allow us to use them for longer, which we expect to generate greater cost efficiencies over time. These investments, along with revenue headwinds, are contributing to higher capital expenditures as a percentage of revenue in 2022 and 2023 than we expect over the long-term. Turning now to the specific CapEx outlook for ’22 and ’23. We expect 2022 capital expenditures, including principal payments on finance leases, to be in the range of $32 billion to $33 billion updated from our prior range of $30 billion to $34 billion. For 2023, we expect capital expenditures to be in the range of $34 billion to $39 billion driven by our investments in data center servers and network infrastructure. An increase in AI capacity is driving substantially all of our capital expenditure growth in 2023. Turning to tax. Absent any changes to U.S. tax law, we expect our fourth quarter 2022 and our full year 2023 tax rate to be similar to the third quarter 2022 rate. In addition, as noted on previous calls, we continue to monitor developments regarding the viability of transatlantic data transfers and their potential impact on our European operations. In closing, we are pleased with the growth of the community using our Family of Apps and the engagement improvements we are driving with efforts such as Reels and our AI-powered content recommendations. While we are facing near-term headwinds on revenue, the fundamentals are there for a return to stronger top line growth. We are approaching 2023 with a focus on efficiency and spending discipline, and I’m optimistic that these moves will set us”