Big Tech AI investment is expected to reach approximately $650 billion in 2026, according to an analysis by Bridgewater Associates. The projected spending by Alphabet, Amazon, Meta, and Microsoft marks a sharp increase from $410 billion in 2025, reflecting accelerating demand for AI infrastructure.
Bridgewater co-chief investment officer Greg Jensen described the artificial intelligence boom as entering a “more dangerous phase.” Compute demand continues to outpace supply, prompting hyperscalers to expand capital expenditures aggressively. To fund this expansion, the four companies have scaled back share buybacks, redirecting capital toward AI-related infrastructure.
Jensen warned that the scale of Big Tech AI investment introduces meaningful downside risks. Exponentially rising infrastructure commitments and growing reliance on external capital increase vulnerability if growth assumptions fail. He noted that companies such as OpenAI and Anthropic may require significant product breakthroughs to justify large final fundraising rounds ahead of potential IPOs. Without credible paths to sustained profitability, elevated valuations could come under pressure.
The ripple effects extend beyond hyperscalers. Jensen highlighted that AI-driven disruption is contributing to volatility in software stocks, suggesting that AI leaders may meet investor expectations only by creating competitive pressure on other sectors.
At the macroeconomic level, Bridgewater estimates technology investment added roughly 50 basis points to U.S. GDP growth in 2025 and could contribute about 100 basis points in 2026. However, the spending surge may also fuel inflation in technology and communications equipment and increase electricity prices in certain regions.
Jensen compared potential downside risks to past cycles, including the dot-com era, while noting that current market movements remain smaller in scale.
The report underscores a pivotal moment: Big Tech AI investment is driving economic expansion but simultaneously increasing systemic financial and sector-specific risks.
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