The AI party has a bill now
Wall Street has spent the last two years treating AI like the ultimate growth cheat code. But BlackRock is basically walking into the room and asking, “Cool story — who’s paying for all these servers?” Its answer: maybe the whole economy.
The firm warned that the AI infrastructure race is adding to inflationary pressure by boosting demand for capital, energy, chips, networking gear, and data-center buildout. In other words, the AI boom is looking less like a neat software fad and more like an old-school industrial spending spree with a very modern logo.
Big tech is writing enormous checks
Amazon, Microsoft, Alphabet, and Meta are pouring money into the AI arms race at a scale that sounds made up until you realize it isn’t. Their combined AI-related spending commitments are approaching roughly $800 billion, with estimates putting Amazon near $200 billion, Microsoft around $190 billion, Alphabet in the $180 billion to $190 billion zone, and Meta between about $125 billion and $145 billion.
That money is flowing into the stuff that keeps the digital world humming:
- data centers
- AI chips
- electricity infrastructure
- networking equipment
- cloud expansion
So yes, the companies are trying to build the future. They’re also helping create a huge new source of demand in an economy already dealing with sticky inflation and supply-chain drama.
Why bond traders care way too much
Here’s the awkward part: the market used to love the idea that AI was pure upside. Now it’s realizing the buildout may have a macro side effect — keeping Treasury yields elevated by sustaining demand for labor, materials, and power. That’s not exactly what rate-sensitive investors wanted for brunch.
BlackRock also noted that stocks and long-term bonds have been selling off together more often lately, which is a fancy way of saying the old playbook is getting tossed out the window. If AI spending keeps the inflation fire warm, Fed rate cuts may stay on the back burner longer than bulls hoped.
Big picture: AI is still a monster theme, but the market may be discovering that every revolution has a utility bill.