The Shocking Math: Paying For AI Capex Will Require Over $1 Trillion In New Debt By 2028

By Vishwanath Tirupattur, global head of quant strategy at Morgan Stanley 

Gen AI and technology diffusion is rapidly reshaping the global economy and remains a key theme for markets across sectors and geographies. That said, its transformative potential hinges on substantial capital expenditure, with data centers at its core. We forecast roughly $2.9 trillion of global data center spend through 2028, comprising $1.6 trillion on hardware (chips/servers) and $1.3 trillion on building data center infrastructure, including real estate, build costs, and maintenance. On an annual basis, this translates into investment needs of over $900 billion in 2028. For context, the total capex spending by all companies in the S&P 500 index combined was about $950 billion in 2024. Such large  potential spending has significant macro consequences as well. Our economists expect that investment spending related to data center  construction and power generation will add up to 40bp to US real GDP growth between 2025-26.