Signal AI sector capital expenditure nearly doubled since early 2025

Summary

According to the report, capital expenditure in the AI sector has almost doubled compared with early 2025. The increase stems from the big technology firms competing for leadership in AI and pouring money into infrastructure. Data centres are being built on an unprecedented scale to deliver enormous computing power, and they use a great deal of energy and require very large investments. The report relays concerns that this spending is not well backed by a substantial earnings model and that data-centre chips may become outdated before they turn a profit. If the AI hype collapses, pension funds, insurers and other investors could suffer heavy losses, and the report sees the risks of financial instability and bursting bubbles rising. Meanwhile the financial effect of AI on companies' operating profit is still limited.