Big Tech Is About to Blow $650 BILLION on AI This Year — And One Hedge Fund Says It Could All Go Wrong

The numbers are almost hard to believe. Four companies — Alphabet, Amazon, Meta, and Microsoft — are expected to spend a combined $650 billion on AI infrastructure in 2026 alone. That's according to Bridgewater Associates, one of the world's largest hedge funds.

To put that in perspective, that's up from $410 billion in 2025. A 60% increase in just one year.

So what are they spending all this money on? Mostly data centers, chips, and the physical stuff needed to run AI models. The demand for computing power is so insane right now that these companies literally cannot build fast enough to keep up.

But here's where it gets scary. Bridgewater's co-chief investment officer Greg Jensen warned that the AI boom has entered a "more dangerous phase." These companies are cutting back on stock buybacks just to fund all this spending. And if something goes wrong — if AI products don't deliver the profits everyone expects — the fallout could be massive.

Jensen specifically called out Anthropic and OpenAI, saying they'll need major product breakthroughs to justify their sky-high valuations before potential IPOs.

The software industry is already feeling the heat. Stocks slipped last week as investors worried that AI might disrupt the very companies building it.

As reported by Reuters.

Source: Reuters