Big Tech's AI Spending to Outpace Pentagon Budget by 2027

Five technology giants are poised to outspend the U.S. military. Morgan Stanley projects combined capital expenditures from Alphabet, Amazon, Meta, Microsoft, and Oracle will reach roughly $1.1 trillion by 2027. That figure represents approximately 3.2% of projected U.S. GDP, dwarfing the annual Pentagon budget.

The bank recently revised its 2026 forecast for their combined spending upward to $805 billion. The investment is primarily flowing into AI infrastructure, including data centers and GPU clusters.

White House AI and crypto czar David Sacks estimates this capital wave will provide a tailwind of more than 3% to GDP growth by 2027. The scale dwarfs the late-1990s telecom boom by a factor of five.

For investors, the primary play is these five companies themselves. The secondary effects may be greater, benefiting chip designers, data center REITs, power generation firms, and cooling technology providers.