AI spending frenzy could reshape the economy, Bridgewater CIOs say

AI has emerged arsenic the cardinal operator of planetary firm concern and a ‌central unit down the marketplace rally, altering superior spending plans crossed industries.

A surge successful firm spending crossed the AI proviso chain, from information halfway infrastructure to chips and power, has helped assistance equity markets ⁠even arsenic worries turn ‌over a imaginable marketplace bubble and the boom's sustainability.

"Straightforward game-theoretic calculations marque it unacceptable for these companies to ‍accept falling down rivals by adjacent a fewer months of progress, truthful 1 company’s determination to walk much aggressively connected AI capex compels others to ​follow," the concern firm's co-CIOs Bob Prince, Greg Jensen and ‌Karen Karniol-Tambour wrote.

Global stocks swung sharply successful the autumn arsenic increasing interest implicit a imaginable AI banal bubble weighed connected sentiment and heightened the hazard of a selloff. Still, Wall Street’s main indexes ended 2025 with double-digit gains, buoyed by beardown capitalist request for AI-linked ⁠stocks.

Bridgewater CIOs said a surge successful ​AI superior spending could summation ostentation arsenic ​higher request pushes up prices of items successful its ecosystem, including chips and electricity.

They added that the dynamics ‍could propulsion up ⁠risks and make bubble-like conditions.

"Easy argumentation risks further accelerating speculative equity marketplace enactment and the frenzy of deal-making and AI concern ⁠that’s already underway, creating a ripe situation for a bubble, and risks enabling ‌a cyclical overheating," the enactment said. ​​​​​

(Reporting by Manya Saini ‌in Bengaluru; Editing by Tasim Zahid)