Big Tech to invest about $650 billion in AI in 2026, Bridgewater says

Feb 23 (Reuters) - U.S. exertion giants Alphabet, Amazon, Meta and Microsoft are expected to collectively put astir $650 cardinal to standard up AI-related infrastructure this ‌year, according to an investigation by Bridgewater Associates.

The investments would people ‌a crisp summation from $410 cardinal successful 2025.

In a missive to clients, Bridgewater co-chief concern serviceman Greg Jensen ​said the artificial quality roar has entered a "more unsafe phase," marked by exponentially rising investments successful carnal infrastructure and increasing reliance connected extracurricular capital.

"Compute request continues to importantly outpace supply, driving hyperscalers to put adjacent much rapidly to effort to someday get up ‌of the demand."

The 4 companies ⁠have already curbed stock buybacks much aggressively to assistance money the surge successful superior expenditure, Jensen said.

The standard of spending, helium said, ⁠is creating important downside risks if thing went wrong.

Anthropic and OpenAI volition request large merchandise breakthroughs to unafraid backing for monolithic last fundraisings up of imaginable IPOs, helium said. ​Without a ​credible way to outsized profits, they could ​struggle to warrant lofty valuations ‌and dense superior demands.

Besides, these products are exposing important risks to different sectors specified arsenic bundle companies and information providers, helium said, pointing to the caller selloff successful bundle stocks.

"It is nary longer imaginable for AI leaders to fulfill their investors' expectations without creating existential risks to different sectors similar software," Jensen added.

Beyond banal markets, ‌Jensen said tech concern spending remains a important "upward ​pressure for U.S. growth."

Bridgewater estimates tech concern added astir ​50 ground points to U.S. ​GDP maturation successful 2025 and could supply astir 100 ground points ‌of enactment this year.

However, the spending ​boom whitethorn besides assistance ​inflation successful exertion and communications instrumentality and propulsion up energy prices successful immoderate regions.

A terrible banal marketplace correction could undermine maturation and bounds companies' quality ​to rise capital, akin to ‌the Dot-com bubble successful 2000, Jensen said, but added that caller ​moves are acold smaller.

(Reporting by Prakhar Srivastava successful Bengaluru and Anirban Sen ​in New York; Editing by Leroy Leo)