Goldman Sachs warns AI boom is running into a cost-of-capital problem

Big Tech has record profits and a spending habit that may be outgrowing them. Goldman Sachs says the AI infrastructure race is now big enough to push up the cost of money itself. In research published in mid-to-late September 2026, the bank argues that hyperscaler capital spending is adding to global demand for capital at the same moment governments need to borrow more. The spending math The bank expects the top five US hyperscalers, Amazon, Alphabet, Microsoft, Oracle and Meta, to put approximately $800 billion into AI infrastructure in 2026. That is nearly double the $413 billion they spent in 2025. On the revenue side, Goldman projects AI-related cloud revenue of about $70 billion above pre-AI trends. The bank estimates roughly $300 billion would be needed to break even on the investment. Goldman frames the resulting annual shortfall at about $230 billion. Reports authored by Goldman strategists Peter Oppenheimer and Ryan Hammond link the rapid ramp in AI capex to weaker free cash flow across the technology sector. Wall Street becomes the lender The convertible bond market shows how fast this is happening. US convertible issuance reached $135 billion as of mid-September 2026, an...