Overview

• AI investments accounted for 1.3 percentage points of last quarter’s 3% GDP growth, surpassing consumer spending’s contribution.
• Major tech companies poured $69 billion into AI infrastructure last quarter and project up to $320 billion in CapEx for the year.
• The spending spree is fueling surging valuations at Nvidia and AMD and boosting utilities and data-center real estate in hubs like Northern Virginia.
• Despite heavy outlays, tech giants have yet to translate AI CapEx into matching profits, leading to a pronounced drag on cash flow.
• Rapid innovation and open-source breakthroughs are making it difficult for any single company to establish a sustainable competitive moat in AI.