AI Business
1d ago
Global capital expenditure projected to reach nearly $5 trillion by 2030, driven by energy and AI
May 10, 2026
AI Summary
The global economy is entering a significant capital expenditure cycle, with projections nearing $5 trillion by the end of the decade. Key drivers include energy security, rising electricity demand, and decarbonization efforts, alongside substantial investments in AI technology from major companies.
- Major companies like Alphabet, Amazon, Meta, and Microsoft are investing heavily in AI, contributing to the capital expenditure boom.
- The energy sector is also experiencing significant capital spending, driven by the energy transition, according to Eli Horton, a senior portfolio manager.
- Three main factors are fueling this capex cycle: energy security, increased electricity demand, and decarbonization efforts.
- U.S. electricity demand is rising after nearly two decades of stagnation, influenced by domestic manufacturing and the electrification of the economy.
- Caterpillar and GE Vernova are highlighted as beneficiaries of this capex wave, with GE's gas turbines sold out until 2030.
- Analysts predict hyperscaler capital expenditure will exceed $800 billion in 2023, with potential growth to $1 trillion next year, largely driven by rising chip prices and demand for computing capacity.
- The capital spending in AI is expected to maintain pricing power and margins for semiconductor vendors, as costs can be passed on to customers.
capital expenditureai spendingglobal economyenergy transitioninvestment trends