Goldman Sachs expects Big Tech to spend $1.2 trillion on AI infrastructure by 2027, dwarfing Wall Street estimates
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Goldman Sachs projects that major technology companies, including Amazon, Alphabet, Microsoft, Oracle, and Meta, will spend a combined $1.2 trillion on AI infrastructure by 2027. This forecast significantly exceeds the current year's estimated $800 billion and surpasses Wall Street’s consensus of $1.1 trillion. Relative to GDP, this investment cycle is described as the largest since the railroad construction era of the 19th century. However, the growth rate is expected to decelerate sharply, dropping from nearly 100 percent in 2026 to 54 percent in 2027 and just 12 percent in 2028. To justify these massive expenditures, the tech giants would need to generate approximately $300 billion annually in AI revenue. While cloud revenue growth has accelerated to 48 percent in Q2 2026, it remains uncertain if AI labs like OpenAI and Anthropic are generating sufficient income to support these outlays. Consequently, spending currently exceeds operational earnings, leading to increased reliance on debt financing amid potential bottlenecks in power, labor, and memory chips.
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