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Big Tech said to invest $650b on AI in 2026
Big Tech companies are projected to invest around US$650 billion in AI infrastructure in 2026, up from US$410 billion in 2025, according to Bridgewater Associates.
The investment includes firms such as Alphabet, Amazon, Meta, and Microsoft.
Bridgewater’s co-CIO Greg Jensen noted that the AI sector is entering a “more dangerous phase,” with increased spending on physical infrastructure and reliance on outside capital.
Jensen highlighted that demand for computing power exceeds supply, prompting rapid investments by hyperscalers.
He warned that this scale of spending poses risks if market conditions change, and that AI startups like Anthropic and OpenAI may need significant breakthroughs to justify future funding and valuations.
Jensen also pointed out potential risks to other sectors, such as software and data providers, amid recent stock selloffs.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
Hyperscalers’ record spending is spooking the stock market
- US$650 billion is a combined estimate, yet individual plans still stand out. Amazon says it expects about US$200 billion in capital expenditures for 2026 1.
- Markets reacted with caution. Amazon, Alphabet, and Microsoft shares fell after recent earnings releases when spending plans took center stage 2.
- Analysts focus on payback. They estimate that a 10% return on US$1 trillion in AI capital needs US$100 billion in extra free cash flow each year, which some see as unlikely 2.
- Large buildouts can also reshape financing. Some analysts see hyperscalers moving from big cash generators to larger debt issuers to fund expansion 2.
AI spending now props up US business investment
- The numbers matter for the wider economy. Apollo Global Management (an alternative asset manager) puts hyperscaler capex (capital expenditures) in 2026 at about US$646 billion, near 2% of US GDP 3.
- That outlay hides weakness elsewhere. Analysis finds that without AI-related purchases, overall U.S. corporate equipment investment would turn negative 3.
- The price tag opens the door to outside capital. With higher costs of capital, some tech giants are turning to infrastructure funds (investors that finance long-lived physical assets) that often back bridges and ports 4.
- Bridgewater warns that fear of falling behind can fuel a bubble. It describes a possible “Barnes and Noble moment” where companies treat AI spending as a must, which can stretch the boom further 5.
