The five largest US cloud providers are on track to spend $800 billion on AI infrastructure this year, representing a 94% increase over 2025 spending. Goldman Sachs strategists project that Amazon, Alphabet, Microsoft, Meta and Oracle will boost these capital expenditures by another 54% to $1.2 trillion in 2027, exceeding the Wall Street consensus of $1.1 trillion. The bank expects total lapex to reach $1.4 trillion in 2028, though the annual growth rate will slow to 12% by that time.

The massive spending scale creates significant monetization pressure, as the hyperscalers need roughly $300 billion in annual AI revenue to break even. While AI investment drives nearly half of the S&P 500's earnings per share growth in 2026, Goldman warns it could become a marginal earnings drag by 2028 due to mounting equipment depreciation. In a worst-case scenario where return on invested capital is zero, the firms would still require $920 billion annually to cover running costs and depreciation.