Finance
AI spending frenzy could reshape the economy, Bridgewater CIOs say
Published by Global Banking and Finance Review
Posted on January 26, 2026
2 min readLast updated: January 26, 2026
Quick Summary
AI spending by corporations is reshaping the economy, with potential risks of a market bubble, say Bridgewater CIOs.
AI spending frenzy could reshape the economy, Bridgewater CIOs say
Impact of AI Spending on the Economy
Jan 26 (Reuters) - Spending on artificial intelligence by large corporations will continue to grow exponentially and reshape the economy, Bridgewater Associates' co-chief investment officers said in a client note on Monday.
Corporate Investment Trends
AI has emerged as the key driver of global corporate investment and a central force behind the market rally, altering capital spending plans across industries.
Risks of an AI Market Bubble
A surge in corporate spending across the AI supply chain, from data center infrastructure to chips and power, has helped lift equity markets even as worries grow over a potential market bubble and the boom's sustainability.
Inflation and Capital Spending Dynamics
"Straightforward game-theoretic calculations make it unacceptable for these companies to accept falling behind rivals by even a few months of progress, so one company’s decision to spend more aggressively on AI capex compels others to follow," the investment firm's co-CIOs Bob Prince, Greg Jensen and Karen Karniol-Tambour wrote.
Global stocks swung sharply in the fall as growing concern over a potential AI stock bubble weighed on sentiment and heightened the risk of a selloff. Still, Wall Street’s main indexes ended 2025 with double-digit gains, buoyed by strong investor demand for AI-linked stocks.
Bridgewater CIOs said a surge in AI capital spending could increase inflation as higher demand pushes up prices of items in its ecosystem, including chips and electricity.
They added that the dynamics could push up risks and create bubble-like conditions.
"Easy policy risks further accelerating speculative equity market activity and the frenzy of deal-making and AI investment that’s already underway, creating a ripe environment for a bubble, and risks enabling a cyclical overheating," the note said.
(Reporting by Manya Saini in Bengaluru; Editing by Tasim Zahid)
Key Takeaways
- •AI spending by large corporations is growing exponentially.
- •AI is a key driver of global corporate investment.
- •Concerns over a potential AI market bubble are rising.
- •AI spending could increase inflation and create bubble conditions.
- •Bridgewater CIOs highlight risks of speculative market activity.
Frequently Asked Questions about AI spending frenzy could reshape the economy, Bridgewater CIOs say
1What is artificial intelligence?
Artificial intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn. AI can perform tasks such as problem-solving, understanding language, and recognizing patterns.
2What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or Producer Price Index (PPI).
3What is capital spending?
Capital spending, or capital expenditure (capex), refers to funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, or equipment.
4What are corporate investments?
Corporate investments refer to the allocation of resources by companies into various assets, projects, or ventures to generate returns. This can include investments in technology, infrastructure, or financial markets.
