David Sacks, the White House AI and crypto czar, has claimed that artificial intelligence infrastructure spending is becoming the single largest contributor to US economic growth, arguing it could add roughly 2.5% to GDP this year and more than 3% in 2027.
Sacks made the case on X on Sunday, citing a new Morgan Stanley report that raised its forecast for combined capital expenditure by Amazon, Alphabet, Meta, Microsoft and Oracle to approximately $805 billion in 2026, up from a prior estimate of $765 billion, and to roughly $1.1 trillion in 2027, compared with an earlier projection of $951 billion.
"I've been saying for a while that AI capex will be a 2% tailwind to GDP growth this year," Sacks wrote.
"In fact, according to a new report from Morgan Stanley, the numbers are even stronger."
The scale of the figures is extraordinary.
In the first quarter alone, Alphabet, Amazon and Microsoft collectively spent $112 billion on infrastructure in a single 90-day period, more than three times the inflation-adjusted cost of the Manhattan Project.
Amazon leads all companies with $200 billion in projected 2026 capital expenditure, followed by Alphabet at $175 billion to $185 billion, Microsoft at roughly $145 billion and Meta at $115 billion to $135 billion.
Oracle has raised its guidance to $50 billion.
Sacks argued that even Morgan Stanley's upgraded figures understate AI's true economic impact because they cover only five hyperscalers and exclude the hundreds of startups, enterprise buyers and adjacent sectors also investing in AI infrastructure.
"Technology leadership has always been America's great strength, and it's driving the economy forward," he wrote.
The claim that AI spending could account for roughly three-quarters of headline GDP growth is not universally accepted.
Morgan Stanley has revised its overall 2026 GDP forecast upward to 2.6%, citing firmer business investment, but other economists caution that capital expenditure concentrated in a handful of companies creates a misleading picture of broader economic health.
Free cash flow at several hyperscalers is under severe pressure, with Amazon projected to turn cash flow negative this year, and Morgan Stanley estimates the sector may need to borrow roughly $400 billion in 2026 to fund the buildout, more than double the $165 billion raised in 2025.
The question hanging over the spending is whether AI revenues can scale fast enough to justify it.
Cloud revenue growth remains robust, with AWS expected to grow 26%, Azure 38% and Google Cloud 50% in the current quarter, but none of the hyperscalers has yet demonstrated positive return on investment from their AI infrastructure at scale.
Related reading
- Anthropic finalising $1.5bn joint venture with Blackstone, Goldman Sachs and Hellman & Friedman
- Bill Ackman's AI bet: Nearly 40% of Pershing Square's portfolio is in Alphabet, Amazon and Meta
- Robinhood Ventures invests $75m in OpenAI
Separately, short-seller Jim Chanos said rising AI-related capital expenditure could lift S&P 500 earnings-per-share forecasts for 2026 and 2027, and JPMorgan projected that leading US cloud providers would raise AI spending by a further $200 billion.
Goldman Sachs estimates total hyperscaler capital expenditure from 2025 through 2027 will reach $1.15 trillion, more than double the $477 billion spent from 2022 to 2024, with the five largest companies planning to add roughly $2 trillion in AI-related assets to their balance sheets by the end of the decade.
The recap
- David Sacks says AI accounted for 75% of first-quarter GDP growth.
- Morgan Stanley forecasts $805 billion in AI capex for 2026.
- Morgan Stanley projects about $1.1 trillion in AI capex for 2027.
