The global investment spree in artificial intelligence is reaching unprecedented levels, with a projected $3tn (£2.3tn) spend on datacentres sparking concerns of a debt-fuelled bubble. The vast warehouses, essential for training and operating AI tools such as OpenAI’s ChatGPT, have seen massive inflows from tech giants.
Nvidia became the world’s first $5tn company last week, while Microsoft and Apple reached $4tn valuations. OpenAI’s restructuring valued the firm at $500bn, with Microsoft’s stake exceeding $100bn. Google’s parent Alphabet reported its first $100bn quarterly revenue, driven by AI infrastructure demand.
However, questions remain over sustainability. Four major players—Amazon, Meta, Google, and Microsoft—are expected to spend over $750bn on AI capital expenditure in the next two years. In Newport, Wales, Microsoft is building a datacentre on a former radiator factory site, with local leaders embracing the economic opportunity.
Joe Tsai, chair of Alibaba, warned of “the beginning of some kind of bubble” due to projects securing funding without customer commitments. Analysts at Morgan Stanley estimate global datacentre spending will reach $3tn by 2028, with a $1.5tn funding gap potentially filled by private credit markets, raising concerns at the Bank of England.
Gil Luria of DA Davidson described the hyperscaler investment as “healthy” but warned that speculative assets and debt for unproven assets could trigger wider ramifications if they sour. The spending spree continues despite these warnings.
