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Citigroup forecasts Big Tech's AI spending to cross $2.8 trillion by 2029
Published by Global Banking and Finance Review
Posted on September 30, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 30, 2025
2 min readLast updated: January 21, 2026
Citigroup forecasts Big Tech's AI spending to exceed $2.8 trillion by 2029, driven by hyperscalers and enterprise demand.
By Rashika Singh and Joel Jose
(Reuters) -Citigroup has raised its forecast for AI-related infrastructure spending by tech giants to surpass $2.8 trillion through 2029, from $2.3 trillion estimated earlier, citing aggressive early investments by hyperscalers and growing enterprise appetite.
The AI boom ignited by ChatGPT's launch in late 2022 has continued to fuel staggering capital outlays and data center expansion despite a brief crisis of confidence sparked by China's cheaper DeepSeek model and lingering market concerns over U.S. President Donald Trump's tariff policies.
The Wall Street brokerage sees AI capex across hyperscalers to reach $490 billion by the end of 2026, up from its earlier estimate of $420 billion.
Data center operators - or hyperscalers - including Microsoft, Amazon and Alphabet have already spent billions of dollars in investments to ease capacity constraints that have hampered their ability to meet surging AI demand.
Citi analysts said hyperscalers were likely to reflect this incremental spend in their third-quarter earnings calls, with the guidance expected to be "building ahead of visible enterprise demand".
Citi estimates global AI compute demand would need 55 gigawatt of new power capacity by 2030, translating to $2.8 trillion in incremental spend, $1.4 trillion in the U.S. alone.
The brokerage said big tech firms are no longer relying only on profits to fund AI infrastructure. The costs are extremely high - about $50 billion for every 1 GW of compute capacity - and the companies are borrowing to keep up.
This shift is already showing up in their financials, with spending starting to eat into free cash flows. Investors are now asking how the tech companies will fund this scale of investment, especially as traditional models fall short.
"Enterprises have provided a clear external validation of value," Citi said, pointing to production deployments at companies such as Eli Lilly, Hitachi and Wolters Kluwer.
(Reporting by Rashika Singh and Joel Jose in Bengaluru; Editing by Pooja Desai)
Citigroup has raised its forecast for AI-related infrastructure spending by tech giants to surpass $2.8 trillion through 2029, up from an earlier estimate of $2.3 trillion.
Citi expects AI capital expenditures across hyperscalers to reach $490 billion by the end of 2026, an increase from the previous estimate of $420 billion.
The high costs of AI infrastructure are starting to impact free cash flows, raising concerns among investors about how tech companies will fund these substantial investments.
Citi estimates that global AI compute demand will require 55 gigawatts of new power capacity by 2030, translating to $2.8 trillion in incremental spending, with $1.4 trillion expected in the U.S. alone.
Citi points to production deployments at companies such as Eli Lilly, Hitachi, and Wolters Kluwer as examples of enterprises validating the value of AI.
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