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AI giants' spending to top $1.2T by 2027
Reports expect that by 2027, the spending on AI infrastructure by the top five US hyperscale companies—Amazon, Alphabet, Microsoft, Oracle, and Meta—will reach $1.2 trillion, representing an increase of more than half over the previous year and surpassing Wall Street's forecast of $1.1 trillion. Despite the continued rapid growth in both spending and revenues from AI applications, Goldman Sachs experts anticipate the growth rate will slow to 54% in 2027 and then further to 12% in 2028, due to ongoing significant funding needs caused by current expenditures exceeding cash flows, along with constraints such as energy shortages, labor shortages, and memory chip limitations. To turn a profit, companies will need to spend around a trillion dollars annually on applications, compared to the two trillion dollars of global software expenditures projected for 2026. Addressing this trend focuses on reaching a breakeven point by increasing revenues and expanding AI usage.
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