Good morning. AI-driven capital spending is scaling rapidly, and the economics remain attractive and increasingly profitable—for now, according to JPMorgan Global Research’s midyear outlook.
Analysts see a broadening AI capex cycle underpinning growth expectations, led by “AI upstream” investments in data centers, chips, and supporting infrastructure. Much of this activity remains concentrated in the U.S., which accounts for about 85% of AI and machine learning venture capital, with spillover benefits expected in China, South Korea, and Taiwan through their roles in semiconductor supply chains.
That broad investment wave is also reshaping corporate strategy, as technology companies race to expand beyond their traditional markets and capture a share of the rapidly growing AI infrastructure opportunity. For example, Qualcomm is the latest major tech company to aggressively expand into the data center market.
While traditionally best known for its smartphone and mobile chip business, the company unveiled a comprehensive AI data center strategy at its Investor Day on June 24, targeting the rapidly growing AI infrastructure market. Qualcomm said it expects its data center business to generate more than $15 billion in annual revenue by fiscal 2029. If the company achieves this goal, the data center unit will become its single largest growth business outside of smartphones.
