Goldman Sachs expects Big Tech to spend $1.2 trillion on AI infrastructure by 2027, dwarfing Wall Street estimates
Goldman Sachs expects five Big Tech firms to spend $1.2 trillion on AI infrastructure in 2027.
Goldman Sachs strategist Ryan Hammond expects Amazon, Alphabet, Microsoft, Oracle, and Meta to spend a combined $1.2 trillion on AI infrastructure in 2027, more than 50 percent above roughly $800 billion projected for 2026 and above Wall Street's $1.1 trillion consensus. Relative to GDP, Goldman calls it the largest investment cycle since 19th-century railroads, though growth is forecast to slow from nearly 100 percent in 2026 to 54 percent in 2027 and 12 percent in 2028. Recouping the outlays would require about $300 billion a year in AI revenue. Cloud revenue growth rose from 25 percent in 2024 to 48 percent in Q2 2026, but spending already exceeds cash from operations, implying more debt, and power, labor, and memory-chip bottlenecks could slow the buildout.
- Amazon, Alphabet, Microsoft, Oracle and Meta seen spending $1.2 trillion in 2027
- Forecast is over 50 percent above 2026 and above the $1.1 trillion consensus
- Spending growth expected to slow to 54 percent in 2027 and 12 percent in 2028
- About $300 billion a year in AI revenue would be needed to recoup outlays
- Spending exceeds operating cash flow; power, labor and memory chips may constrain it
- Organizations
- Goldman SachsOpenAIAnthropic
From the original article
1 min read at the-decoder.com
Goldman Sachs projects that Amazon, Alphabet, Microsoft, Oracle, and Meta will pour a combined $1. 2 trillion into AI infrastructure in 2027, more than 50 percent above this year's levels. Measured against GDP, it would be the biggest investment cycle since railroad construction in the 19th century.
By Manuel Uth · the-decoder.com
A short excerpt; the article and its images belong to the publisher. Summary, key facts and assessment above are AI-written from the article and can be wrong.