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

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Jinse Finance reports that on 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 rise to approximately 3.2% of U.S. GDP by 2027.
If this forecast is realized, annual AI capital spending will exceed 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, the AI capital expenditures of the aforementioned companies are projected to rise from 1.5% of GDP in 2025 to approximately 2.5%, approaching the defense spending ratio of about 2.7%.
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 in 2027. These numbers are "staggering."
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