Huoxing Finance reports that on July 5, The Kobeissi Letter stated that the surge in AI spending is reshaping the U.S. economy. AI capital expenditures by Alphabet, Amazon, Meta, Microsoft, and Oracle are projected to reach approximately 3.2% of U.S. GDP by 2027. If this forecast materializes, annual AI capital spending will surpass U.S. defense spending for the first time, with defense spending expected to account for about 2.7% of GDP next year. This year alone, AI capital expenditures by these five companies are expected to rise from 1.5% of GDP in 2025 to around 2.5%, nearing the 2.7% share of defense spending. These five firms’ AI capital expenditures are projected to exceed $800 billion in 2026 and further rise to a record $1.1 trillion in 2027. These figures are “staggering.”
AI capital spending to exceed the U.S. defense budget by 2027
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Summary
AI capital spending is projected to exceed U.S. defense spending by 2027, according to The Kobeissi Letter. Alphabet, Amazon, Meta, Microsoft, and Oracle are expected to invest $1.1 trillion in AI, accounting for 3.2% of U.S. GDP—compared to 2.7% for defense. This shift underscores rising interest in AI and cryptocurrency news, with on-chain developments also gaining momentum.
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