10/08/2026
The pace of spending on Artificial Intelligence is rising rapidly. And history has a lot to say about industrial buildouts to both companies and investors.
In 2026, companies will likely spend over $800 billion on the AI build-out. From 2027 to 2030, companies are expected to invest an additional $1.2 trillion annually.
Over $1+ trillion dollars is clearly a lot of money.
Now, the current economic output of the United States is $32 trillion per year, which economists call Gross Domestic Product (“GDP”.) Assuming a flat $1 trillion is spent on AI, that is 3.1% of the GDP.
Researchers from Columbia Business School have looked back over the history of the United States and think the size of the AI spending boom exceeds that of the past build outs of railroads, highways, and fiber optic networks.
This is an important historical context. While each of the revolutions had a meaningfully positive impact on the long-term growth of the U.S. economy, the business cycles during the build-out phase were anything other than smooth.
The U.S. suffered from two panics in 1873 and 1893, both of which were directly related to excessive speculation in railroads. The tech bubble of the 1990s ended similarly, with countless bankruptcies.
The pattern we see is that many early investors experience disappointment due to the early and frequent spending.
So what does this mean for your portfolio?
Read Rob’s article to learn more! https://financialdesignstudio.com/article-ai-capital-spending-boom-historical-parallels-and-market-risks/
