AJ Bell warns AI capex boom risks stalling if capital markets balk at funding needs
AMZN•AJ Bell said rising capital spending by major AI companies could face growing downside risks as free cash flow weakens, fixed assets grow and debt rises. Aggregate capex is forecast at $971 billion, or 46% of sales, with consensus forecasts of $1.3 trillion in 2027 and $1.4 trillion in 2028.
1. Funding risks mount
AJ Bell analysis flagged rising downside risks to the AI capital expenditure boom as hyperscalers’ free cash flow weakens, fixed assets grow and debt rises. Aggregate capex across Alphabet, Amazon, Coreweave, Meta, Microsoft, Nebius, Oracle and SpaceX is forecast at $971 billion, or 46% of sales.
2. Spending outlook
Consensus expects capex to reach $1.3 trillion in 2027 and $1.4 trillion in 2028, while capex as a share of sales is projected to ease. A key threat is that capital markets could demand higher funding costs or refuse new equity or debt, forcing companies to pull back spending.
3. AI returns uncertain
In a worst-case scenario, AI may fail to deliver productivity gains and demand could soften, while competition and regulation erode profits despite heavy depreciation burdens.
