Bridgewater Associates estimates that Alphabet, Amazon, Meta and Microsoft will together deploy about $650 billion this year to expand infrastructure tied to artificial intelligence, a sizable step up from the roughly $410 billion invested in 2025. The firm frames the spending surge as part of a new, riskier phase in the AI expansion, driven by rapidly rising requirements for compute capacity.
In a client letter, Bridgewater co-chief investment officer Greg Jensen cautioned that the industry is seeing "exponentially rising investments in physical infrastructure" and an increased reliance on outside capital to fund the build-out. "Compute demand continues to significantly outpace supply, driving hyperscalers to invest even more rapidly to try to someday get ahead of the demand," Jensen wrote, according to Bridgewater's note.
The companies in question have responded by redirecting capital. Jensen noted that the quartet has curtailed share repurchases more aggressively to free up funds for capital expenditure. That reallocation of cash toward long-lived physical assets is central to Bridgewater's concern about downside risk if conditions change.
Bridgewater also highlighted the financing challenge facing AI startups that aim to scale quickly. Jensen said Anthropic and OpenAI will require material product breakthroughs to secure support for very large, final fundraising rounds ahead of any potential public listings. Without credible pathways to outsized profits, he said, those firms may struggle to justify their valuations and the heavy capital they seek.
Beyond financing and valuation issues for AI developers, Bridgewater flagged spillover effects into other parts of the market. The firm pointed to recent selling pressure in software stocks and suggested that advanced AI products and the investments behind them are creating substantive risks for software vendors and data providers. "It is no longer possible for AI leaders to satisfy their investors' expectations without creating existential risks to other sectors like software," Jensen said.
On the macro side, Bridgewater estimates that the wave of technology investment already added about 50 basis points to U.S. GDP growth in 2025, and could contribute around 100 basis points of support this year. At the same time, the firm warned of inflationary pressures within technology and communications equipment, and the potential for higher electricity prices in some regions as data center and compute demand intensify.
Jensen further cautioned that a severe correction in equity markets could curtail economic momentum and impair firms' ability to raise capital, drawing a parallel to the dynamics observed during the dot-com episode, while emphasizing that current moves are notably smaller than that earlier episode.
Context limitations: The firm’s assessment and the specific projections cited above are presented as Bridgewater's analysis. The letter notes risks to market stability, sectoral spillovers, and regional energy price effects tied to the investment surge.