U.S. technology titans Alphabet, Amazon, Meta, and Microsoft are projected to invest approximately $650 billion in AI infrastructure this year. This figure represents a substantial leap from the $410 billion invested in 2025.
Bridgewater Associates' co-chief investment officer, Greg Jensen, characterized the current AI boom as entering a "more dangerous phase." He highlighted the rapid escalation of investments in physical infrastructure and an increased reliance on external funding.
Jensen noted that compute demand continues to significantly outpace supply, compelling major cloud providers to accelerate their investments in an attempt to meet future needs.
These four companies have already reduced share buybacks to help finance this surge in capital expenditure. Jensen warned that the sheer scale of this spending carries significant downside risks should any aspect of the AI development falter.
Companies like Anthropic and OpenAI face the challenge of achieving substantial product breakthroughs to secure funding for their large-scale capital raises, particularly ahead of potential initial public offerings. Without a clear path to exceptional profits, justifying their high valuations and substantial capital requirements could prove difficult.
Furthermore, these AI advancements pose considerable risks to other sectors, including software companies and data providers, as evidenced by recent selloffs in software stocks. Jensen stated that AI leaders can no longer satisfy investor expectations without creating existential risks for other industries.
Beyond the stock market, this technological investment spending is exerting significant upward pressure on U.S. economic growth. Bridgewater estimates that tech investment contributed roughly 50 basis points to U.S. GDP growth in 2025 and could provide approximately 100 basis points of support this year.
However, this spending spree may also contribute to inflation in technology and communications equipment, and potentially increase electricity prices in certain regions. Jensen cautioned that a severe stock market correction could impede growth and limit companies' access to capital, drawing parallels to the Dot-com bubble, though he noted current market adjustments are considerably smaller.