AI capital expenditure is expected to reach $1.1 trillion in 2027, possibly surpassing U.S. defense spending for the first time.

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BlockBeats News, July 5 – The Kobeissi Letter stated that the AI spending boom is reshaping the U.S. economy. The AI capital expenditures of Alphabet, Amazon, Meta, Microsoft, and Oracle are expected to reach approximately 3.2% of U.S. GDP by 2027.

If this forecast is realized, annual AI capital spending will surpass U.S. defense spending for the first time, with the latter expected to account for about 2.7% of GDP next year. For this year alone, AI capital spending by these companies is projected to rise from 1.5% of GDP in 2025 to about 2.5%, approaching the roughly 2.7% share of defense spending.

The AI capital expenditures of these five companies are expected to exceed $800 billion in 2026 and further rise to a record $1.1 trillion by 2027. These numbers are "staggering."

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