Bridgewater associates is flagging big tech’s AI spending boom. The firm published a client note in late January 2026 warning that the scale and pace of AI investment has reached a point where it could reshape how the global economy functions.
In addition, Bridgewater co-chief investment officer Greg Jensen said the artificial intelligence boom has entered a “more dangerous phase,” marked by exponentially rising investments in physical infrastructure and growing reliance on outside capital.
“Compute demand continues to significantly outpace supply, driving hyperscalers to invest even more rapidly to try to someday get ahead of the demand.”
Big Tech’s $650 Billion Bet
To understand the reason for this concern, we must first look at the numbers. Alphabet, Amazon, Meta and Microsoft will collectively spend around $650 billion on AI infrastructure in 2026 alone. That figure marks a 67% jump from the $381 billion all four companies spent in 2025.
In fact, Amazon leads the group at $200 billion with Alphabet making a close follow at $175-$185 billion. Then, Microsoft is targeting $145 billion and Meta rounds out the group at $115-$135 billion.
Supply Chain Under Strain
As a result of this spending boom, supply chains are struggling to keep up. Western Digital’s CEO confirmed during the company’s Q2 earnings call that the firm is “pretty much sold out for calendar 2026,” with firm purchase orders from its top seven customers and long-term agreements stretching into 2027 and 2028.
Also, Hard drive prices have surged roughly 46% since September 2025. Memory chips are sold out through 2027. Data centers are hitting a “soft wall” on power availability, with companies rolling out behind-the-meter natural gas turbines to work around grid constraints.
From Buybacks to Borrowing: A Reversal in How Tech Funds Itself
However, the supply chain is just one end of this problem. Bridgewater also identified a structural shift in how these companies have chosen to fund themselves. For years, they returned billions to shareholders through stock buyback programs but now, they’re in need of capital.
Furthermore, Bridgewater projects that by 2027, the AI sector’s capital needs could exceed total U.S corporate bond market issuance for that year. Jensen further warns that AI leaders can no longer meet investor expectations without creating serious threats to other sectors, including software.
Growth Driver and Economic Risk
Despite the warnings, the AI spending boom is already pushing economic indicators forward. Bridgewater estimates AI-related capex contributed about 50 basis points to U.S. GDP growth in 2025 and could add 100-140 basis points in 2026, with 150 basis points projected for 2027.
Still, the firm cautions that the same surge will likely drive up prices for technology and communications equipment and push electricity costs higher in certain regions.
Market Reaction: $900 Billion Wiped Out
Nevertheless, investors are not waiting to see how it plays out. Markets moved sharply after each earnings report. Amazon shares fell 11% following its disclosure, and Microsoft dropped 18% from its late January peak. Across Amazon, Alphabet, and Microsoft combined, the market erased roughly $900 billion in value.
The sell-off signals that even record spending plans fail to ease investor concerns about whether returns will justify the costs.
What Comes Next: OpenAI, Anthropic, and the IPO Question
Looking ahead, the pressure extends beyond the four tech giants. Anthropic and OpenAI need major product breakthroughs to secure the large fundraising rounds both companies require before any potential public listing.
Thus, without a clear path to strong profits, both firms will struggle to justify their high valuations and heavy capital demands. Ultimately, the next phase of the AI boom will test whether they can deliver results that match their ambitions.
