"Wall Street, however, is concerned about the sustainability of the capex spending craze by leading AI startups and other Big Tech companies, which is generating all kinds of bubble talk. A Business Insider analysis found that Amazon, Microsoft, Meta, and Google could spend an estimated $320 billion on capex, primarily for AI-related needs. OpenAI CEO Sam Altman said in August that he agrees AI could be in a bubble phase, echoing others who have warned that the spending cannot be sustained. Some economists say capex spending is so high right now that it is propping up the entire US economy."
"We're in this new builders era where it's a very singular moment where we are going to probably deploy more capex and more capital for enabling the AI era, and we need it," Marietti told Business Insider."
"We don't have the energy we need to power all the GPUs in the following year," he said."
The AI sector is undergoing a major capital expenditure surge to construct foundational infrastructure that could enable widespread AI deployment and economic change. Energy availability is likely to become the main bottleneck, with large GPU clusters and data centers requiring vast, sometimes self-contained, power supplies. Leading cloud providers and tech firms could invest hundreds of billions in AI-related capex. Some observers warn the spending resembles a speculative bubble and may be unsustainable, while others compare the buildout to historical infrastructure projects that laid groundwork for future growth.
Read at Business Insider
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