In Focus: Equity & Credit Update on AI CapEx

• Companies, especially hyperscalers, are expected to increase their CapEx spending by 60 to 70% this year, with estimated growth to reach 1.3 to 1.4 trillion in the next year.
• Tech companies are significantly increasing R&D and CapEx spending, with estimates suggesting they could reach spending levels comparable to global military spending in the next few years.
• Tech companies are using operating cash flow and borrowing money to fund this growth, with a significant portion of investment grade issuance tied to AI and AI-related sectors.

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