CITIGROUP FORECASTS BIG TECH AI SPENDING TO SURPASS $2.8 TRILLION BY 2029

Artificial intelligence has already become the defining investment theme of this decade, but a new forecast suggests the spending spree has only just begun.

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According to Citigroup, the world's largest technology firms are on track to spend more than $2.8 trillion on AI infrastructure, software, and applications by 2029—a staggering figure that reflects both the promise and the pressures of the AI boom.

THE SCALE OF THE FORECAST

Citigroup's analysis projects that Big Tech companies—led by Microsoft, Google, Amazon, Meta, Apple, and Nvidia—will ramp up Al-related capital expenditures dramatically over the next five years. Much of this spending will go toward building and upgrading data centers, semiconductor capacity, and cloud services capable of running ever-larger Al models.

The $2.8 trillion figure encompasses not only direct infrastructure but also software development, acquisitions, and investments in adjacent industries like robotics and edge computing. If accurate, it would dwarf previous cycles of tech spending, including the dotcom boom and the smartphone revolution combined.

WHAT'S DRIVING THE INVESTMENT

The catalyst is clear: the race to dominate generative Al. Since OpenAl’s ChatGPT burst onto the scene in late 2022, the technology has become a central battleground for tech giants, each vying to embed Al into search engines, productivity suites, cloud platforms, and consumer devices.

Microsoft has committed billions of dollars into OpenAl while simultaneously embedding generative Al agents across its Office suite, Teams platform, and Azure cloud services. The company’s bet is that Al will transform not just individual productivity tools, but the entire fabric of enterprise workflows.