Big Tech Ramps AI Spending; Markets and Risks Rise

Alphabet, Meta, Microsoft, Amazon and Apple are sharply increasing AI capital spending—collectively around $380 billion this year—fueling demand for chips, data centers, energy and construction. The surge concentrates cash flows to chipmakers (Nvidia, AMD, Broadcom) and cloud operators and has helped push major indexes to record highs. Critics and some regulators warn the pace may be unsustainable, risking financial strain, excess capacity or a bubble if demand or compute needs disappoint. An IMF working paper finds rising ICT behaves like a demand shock and that macro outcomes hinge on whether AI complements or substitutes labor, which would affect output, inflation and policy. Developers also warn AI code generators can create a “technical debt” bubble of fragile, hard-to-maintain code.