The race to dominate artificial intelligence has officially entered a new phase—and it's being fueled by the largest corporate spending spree in modern history. According to Wall Street analysts and industry projections, the five largest hyperscalers—Amazon, Alphabet, Microsoft, Meta, and Oracle—are expected to spend more than $600 billion on capital expenditure in 2026, with roughly 75% of that sum, or approximately $450 billion, dedicated directly to AI infrastructure.

That figure represents a staggering 36% increase over 2025 spending levels, continuing a trend that has seen capital expenditure projections consistently underestimate Big Tech's appetite for AI investment. As Goldman Sachs Research notes, consensus capex estimates have proven to be too low for two years running—at the start of both 2024 and 2025, estimates implied roughly 20% growth, but actual spending exceeded 50% in both years.

The Numbers Behind the AI Boom

The scale of investment is difficult to overstate. According to UBS projections, global AI capital expenditure is expected to reach $571 billion in 2026, up from earlier estimates of $500 billion. The bank now forecasts overall spending to reach $1.3 trillion by 2030, implying a compound annual growth rate of 25% over the next five years.

Company by company, the spending commitments are equally eye-opening:

  • Amazon: The e-commerce and cloud giant announced that its total capital expenditures in 2026 will exceed its 2025 projection of $125 billion, with the vast majority dedicated to AI and related infrastructure for Amazon Web Services.
  • Meta: The social media company's CFO confirmed that capital expenditures, which nearly doubled to $72 billion in 2025, will grow "notably larger" in 2026 as the company doubles down on AI-powered products.
  • Microsoft: The company reported capital expenditures of $88.7 billion in its fiscal year 2025, with spending expected to grow at a slower but still substantial pace in fiscal 2026.

What's Driving the Surge?

The spending explosion is being driven by insatiable demand for AI computing power. Data centers, GPUs, and specialized AI chips require massive upfront investment, and hyperscalers are racing to build out capacity before their competitors.

"Powering the 2026 market will be technology, artificial intelligence, and finance," notes one Wall Street analysis, "with gargantuan amounts of capital being poured into data centers and chip and technology manufacturing."

The infrastructure buildout extends beyond servers. Companies are investing in real estate for data centers, renewable energy to power them, and advanced cooling systems to handle the heat generated by thousands of high-performance chips running around the clock.

Investment Implications

For investors, the AI spending surge creates opportunities across the technology supply chain:

  • Semiconductor companies: Nvidia, AMD, and other chipmakers are obvious beneficiaries as AI accelerator demand continues to outpace supply.
  • Infrastructure providers: Data center REITs and power companies are seeing increased demand for their services.
  • The hyperscalers themselves: Companies making these investments are betting that AI will drive future revenue growth and competitive advantages.

The Risk Factor

Not everyone is convinced the spending will pay off. LPL Financial's chief equity strategist has warned that "AI disappointment is the No. 1 risk market in 2026." That disappointment could manifest in several ways: doubts about funding sustainability, concerns about data center construction timelines, or skepticism about whether AI investments will generate adequate returns.

There's also the question of funding. Hyperscalers are increasingly leaning on debt markets to bridge the gap between rising AI capex budgets and internal free cash flow. Aggregate capital expenditure for the big five, after accounting for buybacks and dividends, now exceeds projected cash flows—requiring external funding.

Goldman Sachs Research offers a historical perspective: AI hyperscaler capex would need to reach $700 billion in 2026 to match the peak spending rates seen during the late 1990s telecom investment cycle. While we're not there yet, the trajectory is certainly pointing in that direction.

The Bottom Line

Whether you view the $600 billion spending spree as visionary investment or irrational exuberance, one thing is clear: the AI arms race is reshaping corporate finance and creating massive ripple effects throughout the global economy. For investors entering 2026, understanding the dynamics of hyperscaler spending may be essential to navigating the year ahead.