AI Capex to Hit Record $1.1 Trillion in 2027, Forecast to Surpass U.S. Defense Spending for First Time

According to The Kobeissi Letter on July 5, combined AI capital expenditures by Alphabet, Amazon, Meta, Microsoft, and Oracle are projected to reach approximately $1.1 trillion in 2027, representing 3.2% of U.S. GDP. If realized, this would mark the first time annual AI capex exceeds U.S. defense spending, estimated at 2.7% of GDP next year. The five companies' AI capex is forecast to surpass $800 billion in 2026 before reaching the record $1.1 trillion figure in 2027.
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