The EconomistAug 4, 2026 – 9.00amYou ain’t seen nothing yet. Last year America’s biggest technology companies, including Amazon, Google and Microsoft, spent $US450 billion ($640 billion) on infrastructure, much of it to power artificial intelligence. This was just an amuse-bouche. For the main course, they will spend $US900 billion on chips, data centres, power and so forth this year, with a $US1.4 trillion pudding to follow in 2027. To fund this feast, they have borrowed more than $US400 billion this year. The AI capex boom is fast becoming the largest investment surge in history.If superintelligence is in reach, building football fields’ worth of compute could also be history’s most valuable capital-allocation exercise. And yet capital spending can still generate disappointing returns for investors. Since peaking in June, the share prices of the biggest AI firms have fallen by 20 per cent, as worries have mounted that flows of capital from one tech firm to another, rather than genuine demand from end-users, have been propping up the industry, while South Korea’s benchmark index, dominated by Samsung Electronics and SK Hynix, two big chipmakers, has dropped by almost 40 per cent. After Meta reported second-quarter earnings on July 29, its shares shed more than 7 per cent, even as Mark Zuckerberg, its boss, defended its spending on AI, which has eaten deeply into free cashflow.Loading...The EconomistSaveLog in or Subscribe to save articleShareCopy linkCopiedEmailLinkedInTwitterFacebookCopy linkCopiedShare via...Gift this articleSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? LoginRead MoreInvestingAIAnalysisGoogleMicrosoftAmazonMetaAnthropicOpenAISpaceXFetching latest articles