I often write that the industrial revolution was the biggest thing to happen in human history but we might be re-writing history right now.
I want to underscore the amount of spending that’s going into AI right now because the numbers are almost unfathomable, something I touched on yesterday.
Google, Amazon, Microsoft, and Meta collectively plan to spend $725 billion on capex in 2026, up 77% from last year’s record $410 billion. Those numbers are accelerating. OpenAI will also spend $100-$125 billion and Anthropic might be in the $50 billion range. In China, they’re likely to be spending somewhere in the $100-$200 billion range and then you can add in another $100-$200 billion in costs for power, the grid, cooling, gas turbines, substations and land.
All in, that’s somewhere in the $900 billion to $1.3 trillion range for this year alone, and no one is indicating any slowdown from there (at least not yet).
These are truly staggering numbers that I want to put into perspective:
- That’s around double the cost of the entire 35-year project of building the US interstate highway system, which took 35 years (inflation adjusted)
- Slightly below the entire UK government budget and roughly double Germany’s federal budget
- About 1.5x Japan’s budget
- Larger than the GDP of every country except the USA
- About 4x larger than the multi-year Apollo project to put a man on the moon (inflation adjusted)
- Apollo spending peaked at 4.4% of Federal spending, AI capex right now is equivalent to 15-20% of US government spending
Here is the big one: The estimated total spending on WWII in today’s dollars was $4-7 trillion, globally for the duration of the war. At this pace, AI spending will match that. For the US alone, peak WWII spending was $1 trillion per year in today’s dollars and US AI spending alone this year is close to that. Now as a percentage of GDP it’s much smaller but the sheer scale of it is the same.
In terms of private capital, there has never been anything like it, nothing close.
…and the application of it all is: Replacing human thinking.
