Major technology corporations such as Alphabet, Amazon, Meta, and Microsoft are set to dramatically increase their investments in artificial intelligence infrastructure, with projections indicating a collective spend of approximately $650 billion by 2026. This substantial rise from $410 billion in 2025 highlights a critical juncture in the AI landscape. Bridgewater Associates, through its co-chief investment officer Greg Jensen, warns that this escalating investment signals a more precarious stage in the AI boom, where rapid expansion and dependence on outside funding could introduce considerable financial vulnerabilities. Jensen also notes that the intense demand for computing power continues to outstrip supply, pushing these hyperscalers to accelerate their investments further. The shift has already led to a reduction in share buybacks by these companies to finance the immense capital outlays, raising concerns about potential market corrections and the sustainability of such rapid growth.
Big Tech's AI Spending Blitz: A Deep Dive into Future Investments and Emerging Risks
In a detailed analysis released on Monday, February 23, 2026, Bridgewater Associates shed light on the burgeoning investment trends within the artificial intelligence sector. According to their projections, the tech titans – Alphabet, Amazon, Meta, and Microsoft – are on track to channel an estimated $650 billion into AI-related infrastructure by 2026. This monumental figure represents a significant leap from the $410 billion invested in 2025, underscoring a period of aggressive expansion in the AI domain. Greg Jensen, co-chief investment officer at Bridgewater, articulated in a letter to clients that the AI surge has entered a "more dangerous phase." This new epoch is characterized by an exponential increase in physical infrastructure investments and a heightened reliance on external capital for financing these ambitious projects. The relentless demand for computational resources continues to outpace available supply, compelling leading tech firms to accelerate their spending in a bid to stay ahead. Jensen pointed out that these four tech giants have already curtailed share buybacks more aggressively to fund their escalating capital expenditures. He warned that the sheer magnitude of this spending spree introduces substantial downside risks if unforeseen complications arise. Furthermore, Jensen highlighted that AI pioneers like Anthropic and OpenAI would require groundbreaking product innovations to secure significant final funding rounds ahead of potential initial public offerings. Without a clear and credible pathway to exceptional profitability, these companies might struggle to justify their elevated valuations and considerable capital requirements. He also observed that these AI advancements are creating significant competitive pressures for other sectors, including software companies and data providers, as evidenced by recent sell-offs in software stocks. Jensen emphasized that AI leaders can no longer meet investor expectations without creating existential threats to other industries. Beyond market dynamics, Jensen indicated that tech investment spending continues to exert significant "upward pressure for U.S. growth," with Bridgewater estimating that tech investments contributed approximately 50 basis points to U.S. GDP growth in 2025 and could add around 100 basis points this year. However, this investment boom may also drive up inflation in technology and communications equipment and push electricity prices higher in certain regions. Jensen concluded by drawing parallels to the Dot-com bubble of 2000, cautioning that a severe stock market correction could impede growth and limit companies' ability to raise capital, although he noted that current market movements are considerably smaller in scale.
This report from Bridgewater Associates serves as a vital signal, urging both investors and industry leaders to critically evaluate the long-term sustainability and potential systemic risks associated with the current AI investment frenzy. While the rapid growth promises innovation and economic benefits, the increasing capital intensity and reliance on external funding highlight the need for robust strategic planning and careful risk management. The parallels drawn to the Dot-com era are a powerful reminder that even the most revolutionary technologies are not immune to market corrections, and a balanced approach to investment and development is paramount to avoid potential pitfalls.