Fitch Ratings warns AI capex boom faces risks before 2027

Middle East tensions, tighter financing and weakening AI pricing power could test Big Tech's spending spree, the rating agency says Big Tech is spending on artificial intelligence like the bill will never arrive. Fitch Ratings would like a word. The credit rating agency says Middle East risks and tighter financing conditions threaten the AI spending boom before 2027. The numbers behind the nerves Fitch projects that US hyperscalers, including Alphabet, Amazon, Meta and Microsoft, will lift their 2026 capital expenditure by over 75%, to approximately $700 billion. Fitch expects that spending could keep rising. The agency’s analysis suggests capex from these leading hyperscalers could exceed $1 trillion a year from 2027 to 2029. Fitch describes that figure as significantly higher than what was previously considered justifiable. IT capital investment added 1.4 percentage points to US GDP growth in the first quarter of 2026, according to the research. Corporate bond issuance rose 26% in the first half of the year. Six major issuers raised $182 billion in investment-grade bonds in 2026, with AI the largest driver. Fitch notes that corporate valuations and debt issuance are pushing towar...