Big Tech’s Trillion‑Dollar AI Bet Enters “Perilous Phase” As Investors Question Collateral Damage

The AI investment boom that defined 2025 has not slowed; it has intensified – and that acceleration is now making even some of the world’s largest hedge funds and asset managers nervous.

According to a February note from Bridgewater’s co‑CIO Greg Jensen, reported by Reuters, Alphabet, Amazon, Meta and Microsoft are on track to spend about 650 billion dollars on AI‑related capital expenditure in 2026, up from around 410 billion in 2025. Big Tech’s planned AI capex for this year alone is roughly equivalent to the annual GDP of a mid‑sized G20 economy.​

Jensen warns that the AI boom has now entered a “more perilous phase,” characterized by soaring investments in physical infrastructure – data centers, chips, networking – and a heightened dependence on external funding. The concern is not simply about whether the AI leaders can earn enough to justify the spending; it is also about the collateral damage their products may inflict on other sectors.

Investors got a taste of that tension in early February, when Reuters reported that Amazon shares fell about 7% after the company unveiled a 200‑billion‑dollar capex plan, while Alphabet dropped 3% after telling markets its capital expenditures could double this year. Meta also slipped, as traders digested what a combined 600‑billion‑plus AI splurge might mean for free cash flow and sector‑wide profitability.​

Bridgewater notes that the new generation of AI products pose “existential threats” to parts of the software and data‑provider ecosystem, as generative models automate tasks and commoditise capabilities once sold as premium services. This aligns with the recent slide in software and data‑analytics stocks, which have come under pressure as clients weigh whether to build on general‑purpose AI stacks rather than buy narrower, expensive tools.

Beyond markets, AI accountability is struggling to keep pace. A Reuters analysis of board‑level AI governance notes that global AI investment is expected to surpass 500 billion dollars this year, with a handful of tech giants controlling more than 60% of cloud and data‑processing capacity. Yet regulatory frameworks and internal oversight often lag, leaving boards exposed to reputational and compliance risk if deployments go wrong.​

Corporate‑accountability groups are responding with public campaigns. In London, for example, activists drove a billboard truck around Westminster urging the prime minister to confront Elon Musk and “ban X and Grok” over disinformation and safety concerns. The symbolism is clear: AI and its platforms are now seen as political and social infrastructure, not just commercial products.​

Jensen argues that while AI capex is adding roughly half a percentage point to US GDP growth and could add a full percentage point this year, the spending boom may also fuel inflation in technology and communication equipment and contribute to electricity‑price spikes in certain regions. If a sharp equity correction forces companies to cut back, the macro impact could resemble a small‑scale echo of the dot‑com bust.

For boards and regulators, the implied message is stark. If AI is going to be the engine of the next growth phase, governance and risk controls must catch up fast. Allowing accountability to trail a trillion‑dollar investment wave is no longer a risk that serious business or political leaders can afford to take.