Five companies are about to outspend the Pentagon. Let that sit for a second.
Morgan Stanley projects that combined capital expenditures from Alphabet, Amazon, Meta, Microsoft, and Oracle will hit roughly $1.1 trillion by 2027, representing approximately 3.2% of projected US GDP. To put that in perspective, the annual US defense budget, long considered the ultimate expression of national spending priorities, would be smaller than what five tech CEOs decide to pour into AI infrastructure.
The numbers behind the AI arms race
Morgan Stanley’s 2026 forecast for combined capex across these five companies was recently revised upward to around $805 billion, up from a prior estimate of $765 billion.
Most of this capital is flowing into AI-related infrastructure. Data centers, GPU clusters, and the leases required to house them are consuming the lion’s share of these budgets.
