Major technology companies will spend over $1 trillion on AI infrastructure by 2027, says UBS. This massive investment supports US economic growth as demand for computing power outstrips supply. “Demand has exceeded capacity ahead of schedule,” the report said. While spending helps the economy, it also creates new financing pressures.
Synopsis
Major technology companies are projected to invest more than USD 1 trillion in artificial intelligence infrastructure by 2027. Reports indicate that demand for computing capacity is exceeding supply, influencing investment decisions.
Investment by major technology companies in artificial intelligence (AI) infrastructure is expected to exceed $1 trillion in 2027 as demand for computing capacity continues to outstrip supply, supporting US economic growth despite rising financing needs, according to a report by UBS.
The report estimates that AI-related capital expenditure by major technology companies will exceed $600 billion in 2026 before crossing $1 trillion in 2027.
“Demand has exceeded capacity ahead of schedule,” the report said, noting that companies have raised their investment plans as demand for computing power continues to grow. UBS expects spending to keep rising over the next year, although the pace of growth could peak in 2027 as higher investment puts pressure on cash flows and increases the need for additional financing.
AI investment has also become a significant contributor to US economic growth. UBS estimates that spending on AI infrastructure contributed around 0.75 percentage points to US GDP growth in the first half of 2026, while rising equity prices linked to AI companies provided an additional boost to household wealth and consumption.
However, the report said there is still little clear evidence that AI has materially increased overall productivity or caused substantial job displacement. Its estimated impact on the overall unemployment rate remains limited, at around 0.2 percentage points or less.
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The effects are more visible in certain industries. Employment in selected high-technology sectors, including software and computer systems design, fell 1.4 percent year-on-year, while construction industries supporting data centre infrastructure recorded employment growth of nearly 3 percent.
UBS also flagged emerging financing pressures as companies spend more on AI infrastructure. Cash flows at major technology companies have weakened, while demand for their bond issuances has become less robust. The report said investors expect free cash flow to return to positive territory in 2028, provided companies can generate sufficient revenue from AI services.
The report added that AI demand is currently contributing to higher prices in some areas, including software, digital goods and electricity, even though productivity gains could reduce inflation over time.
UBS said the outlook for the AI investment cycle will depend on whether demand continues to exceed available computing capacity and whether companies can turn their investments into sustainable revenue growth.
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