AI Spending: Tech Giants' Trillion-Dollar Gamble
Update: 2025-12-23
Description
Big techs AI spending boosts U.S. economy, but risks loom large. Deutsche Bank and Bank of America report that AI-related investments are driving growth and increasing GDP, with hyperscalers like Alphabet, Meta, Microsoft, Amazon, and Oracle set to pour $399 billion into AI capital expenditures this year. However, this surge is funded by debt, with net new debt from AI issuers topping $200 billion in 2025. While each dollar of capital spending has historically generated extra revenue and earnings, Deutsche Bank warns that hyperscalers could spend $4 trillion on AI data centers by 2030, with no guaranteed payoff. Markets remain steady as the AI gamble continues.
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