The global economy is experiencing the largest capex cycle ever, with nearly $5 trillion seen by the end of the decade—and it’s not all AI spending |
The global economy is experiencing the largest capex cycle ever, with nearly $5 trillion seen by the end of the decade—and it’s not all AI spending
AI hyperscalers aren’t the only big spenders fueling the economy and financial markets as the energy sector is experiencing its own capital tsunami.
Alphabet, Amazon, Meta, and Microsoft have been plowing hundreds of billions of dollars a year into AI. But the Iran war and closure of the Strait of Hormuz have highlighted another factor in capital spending.
“I do believe this is the the largest capital cycle the global economy has ever experienced—that being the energy transition,” Eli Horton, a senior portfolio manager for TCW’s equity products, told CNBC on Thursday.
He cited three drivers to the capex boom: energy security, rapid growth in electricity demand, and ongoing........