Citigroup has raised its forecast for AI infrastructure spending by major tech firms to over US$2.8 trillion through 2029, up from US$2.3 trillion previously.

The bank cited higher-than-expected early investments by large data center operators like Microsoft, Amazon, and Alphabet, as well as rising demand from businesses.

Citigroup now expects AI capital expenditures among these companies to hit US$490 billion by the end of 2026, compared to its earlier estimate of US$420 billion.

The firm projects that global AI compute demand will require 55 gigawatts of new power capacity by 2030, with US$1.4 trillion in spending needed in the US alone.

Citigroup noted that tech companies are increasingly borrowing to fund these investments, as the costs—about US$50 billion per gigawatt—are starting to affect free cash flows.

🔗 Source: Reuters

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