Artificial intelligence has become the defining investment theme of the current market cycle, with capital expenditure on AI infrastructure reaching unprecedented levels. Hyperscalers have announced nearly $400 billion in capex for this year alone, and forecasts suggest annual increases of 30% in the years ahead. As investors weigh the promise of this transformative technology against the risks of overbuilding, the debate intensifies: will markets continue to run efficiently or are we repeating the excesses of past tech booms that led to busts?
In Episode 76 of The Flip Side podcast, Brad Rogoff, Global Head of Research, and Venu Krishna, Head of US Equity Strategy, examine the forces behind the AI investment surge and consider the bull and bear cases that surge presents. They explore whether current spending is justified by demand, how power and infrastructure constraints could shape the outlook, and what lessons can be drawn from previous cycles of rapid tech expansion.
With AI capex now central to both equity valuations and broader economic growth, this episode unpacks the critical questions facing portfolio managers as they navigate one of the most consequential debates in today’s markets.
For deeper insight, clients can access related Barclays Research on Barclays Live:
Equity Strategy: Lost My Chain-of-Thought: Could the AI narrative stumble?
Food for Thought: Generative AI vs. cash generation
Episode 69 'Is there too much hype for AI and the hyperscalers?'
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