Goldman Sachs: Big Tech to spend $1.2 trillion on AI infrastructure by 2027

Goldman Sachs expects Amazon, Alphabet, Microsoft, Oracle and Meta to spend a combined $1.2 trillion on AI infrastructure in 2027. That is more than 50 percent above the roughly $800 billion the five companies are projected to spend in 2026 and above Wall Street's consensus estimate of $1.1 trillion, Bloomberg reported, citing strategist Ryan Hammond.

Relative to the size of the economy, it would be the largest investment cycle since railroad construction in the 19th century, the bank says.

Growth is slowing

The pace of spending growth is set to drop sharply: from nearly 100 percent in 2026 to 54 percent in 2027 and 12 percent in 2028. Goldman Sachs had already warned in June that consensus estimates were far too low.

How the outlays would be recouped

To recoup the spending, the companies would need about $300 billion a year in AI revenue. Current earnings still fall short of that level, though cloud revenue growth jumped from 25 percent in 2024 to 48 percent in the second quarter of 2026.

Spending now exceeds what the companies generate from ongoing operations, which means more debt financing. Bottlenecks in power, labor and memory chips could slow the buildout further.

Open question over AI lab revenues

It remains unclear whether revenue growth at AI labs such as OpenAI and Anthropic is fast enough to justify the investments. Both companies sit at the heart of the expectations and of the financial instruments backing the buildout.