UBS Projects Tech Giants' AI Investments to Surpass 1 Trillion dollar in 2027, Boosting US Economic Growth

Major technology companies are expected to invest more than USD 1 trillion in artificial intelligence (AI) infrastructure in 2027, as demand for computing power continues to outpace available capacity, according to a report by UBS. The investment surge is also likely to support economic growth in the United States. UBS estimates that AI-related capital expenditure by leading technology firms will surpass USD 600 billion in 2026 before crossing the USD 1 trillion mark in 2027. The report noted that companies have increased their spending plans earlier than anticipated as demand for AI computing resources accelerates.

The pace of investment growth could peak in 2027 as rising expenditure puts pressure on corporate cash flows and increases the need for external financing. AI infrastructure spending has emerged as an important driver of the US economy. According to UBS, AI-related investment contributed approximately 0.75 percentage points to US gross domestic product (GDP) growth during the first half of 2026. Gains in the stock prices of AI-focused companies also supported household wealth and consumer spending.

Despite the investment boom, the report found limited evidence that AI has significantly improved overall productivity or triggered widespread job losses so far. Its estimated effect on the overall unemployment rate remains relatively small, at around 0.2 percentage points or less. Employment trends vary across industries. Jobs in selected technology sectors, including software and computer systems design, declined 1.4 per cent year-on-year. In contrast, employment in construction industries linked to data centre development increased by nearly 3 per cent, reflecting the growing demand for physical infrastructure needed to support AI operations.

UBS also highlighted financial risks associated with the rapid expansion of AI infrastructure. Cash flows at major technology companies have weakened as investment requirements have increased, while demand for their bond offerings has become less robust. Investors expect free cash flow to return to positive territory in 2028, provided companies can generate sufficient revenue from AI-powered products and services, the report said.

The growing use of AI is also influencing prices in some parts of the economy, including software, digital products and electricity. While infrastructure demand may contribute to higher costs in the near term, productivity improvements could help ease inflationary pressures over time. According to UBS, the sustainability of the AI investment boom will ultimately depend on whether demand for computing capacity remains strong and whether technology companies can convert their substantial infrastructure spending into consistent and profitable revenue growth.

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