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I’ve been saying for awhile that AI capex will be a 2% tailwind to GDP growth this year. In fact, according to a new report from Morgan Stanley, the numbers are even stronger — more like 2.5% this year and over 3% next year.
And this understates the impact of AI for two reasons:
(1) This is just investment by 5 hyperscalers; it doesn’t include all the startups and other companies investing in AI.
(2) Capex is the investment to create the token factories; it doesn’t count the economic activity resulting from what happens inside the token factories. Those tokens are now being used to generate code (bespoke software) that will increase productivity throughout the economy. The ROI on capex is likely to dwarf the capex itself, which is why investment continues to grow.
In Q1, AI was already 75% of GDP growth. That trend is likely to continue. Technology leadership has always been America’s great strength, and it’s driving the economy forward.
Polls may show that AI is not popular, but economic growth is. At this point, stopping progress in AI would be equivalent to halting the U.S. economy.
Holger Zschaepitz@Schuldensuehner
Morgan Stanley has again raised its capex forecasts for the five hyperscalers Amazon, Alphabet, Meta, Microsoft, and Oracle. It now expects them to spend about $805bn this year, up from a previous estimate of $765bn. For next year, the forecast has been lifted from $951bn to $1.1TRILLION. To put that into perspective, their 2026 spending alone would be roughly equal to what all non-tech companies in the S&P 500 spent combined in 2025. The expected ~$800bn for 2026 is nearly double 2025 levels and about three times what was spent in 2024.
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