Goldman Sachs Predicts Prolonged AI Capital Expenditure Surge
Big Tech companies are expected to maintain high capital expenditures for several years as they race to build out artificial intelligence infrastructure, according to Goldman Sachs. Eric Sheridan from the firm's TMT Group said that a supply-demand imbalance in AI will persist until at least mid-2028, leading to continued elevated spending and higher input costs such as memory pricing and chip prices. Recent earnings reports highlight this trend: Alphabet raised its full-year capex guidance to $195 billion–$205 billion for 2026. Tesla announced a record $25 billion in capital expenditures, while SpaceX's Q2 spending of $18.4 billion far exceeded expectations and could reach around $65 billion annually. JPMorgan has warned that SpaceX may spend up to $200 billion on AI over the next two years. Goldman Sachs emphasized a shift from focusing solely on capex amounts to evaluating returns on investment, with companies like Microsoft and Amazon setting an example by providing clearer ROI visibility during earnings calls.
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Topics: AI infrastructure Big Tech earnings capital expenditures (capex) data center expansion