Big Tech AI spending hits $650B - will the payoff arrive by 2028?
For roughly two years, Wall Street directed substantial capital toward any venture featuring “AI” in its business proposal. Currently a more sobering question is taking over trading desks: when does Big Tech AI spending actually start paying for itself? According to a Fortune report, major asset managers think they already know the answer, and it involves a number even bigger than the eye-watering budgets making headlines this earnings season.
Key takeaways
- Big Tech’s AI-related capital spending is projected between $635 billion and $665 billion by 2026, according to Fortune.
- Global AI investment across every sector is expected to top $1 trillion by 2026.
- Asset managers expect Amazon, Microsoft, Alphabet and Meta to add roughly $340 billion to annual operating cash flow by 2027.
- Janus Henderson’s Richard Clode expects hyperscaler profits and cash flow to outpace incremental capex by 2028.
- Neocloud providers CoreWeave and Nebius have rallied on AI capacity shortages, while AI monetization still needs to grow between 5x and 13x to justify current spending plans.
Big Tech AI spending faces a new scrutiny phase
The scale of the buildout is hard to overstate. Big Tech’s AI-related capital expenditure is projected to land somewhere between $635 billion and $665 billion by 2026, Fortune reported. Zoom out further and the picture gets even bigger: global AI investment across all industries is expected to blow past $1 trillion that same year.
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