The $758 Billion Question: Putting AI Spending in Perspective
You’ve probably heard that technology companies are spending staggering sums on artificial intelligence. To meet the surging demand for computing power, some of the largest tech companies- “hyperscalers”- are building data centers on a massive scale and this takes enormous capital (also referred to as capex, short for capital expenditures). In this post, I’ll put that spending into context and highlight one of the ways it’s shaping the market so far this year.
In its June 30, 2026 update J.P. Morgan estimated that Alphabet*, Microsoft, Oracle, Amazon, and Meta will spend $758 Billion on A.I. capex this year. This is an 82% jump from last year, a tenfold increase over the last 7 years, with more projected over the next two years.
To put this into perspective: if this year’s combined A.I capex spend were a country, it would be about the size of Sweden’s economy- roughly the world’s 26th largest- and larger than Israel or Argentina.
In comparison to history, this could be viewed as one of the largest buildouts by private companies in the modern era. The chart below shows the present day and past investment booms as a share of GDP. By this measure, the A.I. capex spend is larger than many past landmark projects- including the rise of U.S. unconventional oil and gas production, the 1990’s telecom and fiber buildout, and the Interstate Highway System.
The spending is already showing up as real revenue in companies’ results. One firm’s capex is another’s revenue: the money that hyperscalers pour into data centers is flowing into their suppliers. Semiconductor and computer hardware equipment companies are demonstrating revenue and earnings growth that is well above average for the S&P 500.
A.I. capex spending is striking in both its scale and place in history. Reasonable people are making bullish and bearish cases for how today’s investment will ripple through the economy. Spending on this scale is not without risk; after all, history shows that some investment booms can lead to over-building and create busts.
Context like this helps us maintain perspective rather than get swept up in short-term market trends. At Peak we take the long view: focusing on investment fundamentals, knowing what we own, and designing portfolios aligned with our clients’ needs.
*Alphabet, Microsoft, and Oracle are currently held in the Peak Model Stock Portfolio. The Model Portfolio is not a real cash portfolio. It represents the core direction of our portfolio management strategies. Individual client portfolios are managed in accordance with the clients’ specific objectives and constraints. Historical information is available upon request.
Advisory Services offered through Peak Asset Management, LLC, an SEC registered investment advisor. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Investing involves risk, including the possible loss of principal. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. All strategies and services described involve risks, tax implications, and potential limitations, and may not be appropriate for every investor; clients should consider these factors carefully before making decisions. This content is developed from sources believed to be providing accurate information and may have been developed and produced by a third party to provide information on a topic that may be of interest. This third party is not affiliated with Peak Asset Management. It is not our intention to state or imply in any manner that past results are an indication of future performance. The charts and figures in this blog were created by Claude. Copyright © 2026 Peak Asset Management
