Citigroup raises AI infrastructure spending forecast

• Believes global demand for AI compute will need an additional 55 gigawatts of power by 2030.

Citigroup has sharply increased its estimate for AI infrastructure spending by tech titans, projecting that these investments will surpass $2.8 trillion by 2029.

This marks a major jump from the $2.3 trillion forecasted earlier, driven by fast-track investments from hyperscalers and a clear rise in enterprise adoption of AI tools.

The explosion in artificial intelligence—sparked most recently by the launch of ChatGPT in late 2022—continues to lead to massive spending and rapid data centre expansion. While cheaper models like China’s DeepSeek and ongoing worries over US trade policy initially gave some investors pause, the appetite for capital expenditures has not lost momentum.

Citigroup now expects that hyperscalers—those cloud and infrastructure powerhouses like Microsoft, Amazon, and Alphabet—will channel $490 billion into AI capital investments by the end of 2026. That’s up from $420 billion previously anticipated.

These firms have collectively poured billions into boosting data centre capacity and resolving supply chain bottlenecks to stay ahead of swelling AI demand.

Financial strain

According to Citi analysts, this ambitious wave of spending should become evident in upcoming earnings calls, with tech giants likely to issue guidance that reflects ramped-up infrastructure outlays—even before enterprise demand becomes fully visible.

Looking further out, Citigroup believes global demand for AI compute will need an additional 55 gigawatts of power by 2030. This level of expansion necessitates around $2.8 trillion in extra capital spending globally, with US hyperscalers on the hook for about half of that total.

What’s especially striking is that many of these companies are no longer able to rely just on profits to fund such immense projects. At roughly $50 billion for every added gigawatt of compute, the financial strain has forced tech firms to tap into debt markets and creative financing strategies.

This new reality is beginning to show up in reduced free cash flows, and investors are demanding clarity on how tech leaders plan to finance these outlays without jeopardising long-term returns.

Citigroup notes, however, that enterprise deployments from companies like Eli Lilly, Hitachi, and Wolters Kluwer provide strong external validation of the ongoing value reshaping the tech investment landscape.