Goldman Sachs expects Amazon, Alphabet, Microsoft, Oracle, and Meta to spend a combined $1.2 trillion on AI infrastructure in 2027. That’s over 50 percent above the roughly $800 billion projected for this year and tops Wall Street’s consensus of $1.1 trillion, according to Bloomberg, citing strategist Ryan Hammond. Relative to GDP, it would be the biggest investment cycle since railroad construction in the 19th century.

Growth is slowing, though. The pace drops from nearly 100 percent in 2026 to 54 percent in 2027 and 12 percent in 2028. To recoup those outlays, the companies would need about $300 billion a year in AI revenue. Current earnings still fall short, but cloud revenue growth jumped from 25 percent in 2024 to 48 percent in Q2 2026. It’s still unclear whether revenue growth at AI labs like OpenAI and Anthropic is fast enough to justify these investments. Both companies are at the heart of the expectations and financial instruments backing the buildout.

Goldman also says spending now exceeds what the companies generate from ongoing operations, which means more debt financing. Bottlenecks in power, labor, and memory chips could slow things further. Back in June, Goldman had already flagged that consensus estimates were far too low.