Key Points
- Global AI spending is projected to reach $3.33 trillion in 2027. The bulk of the spending is on AI infrastructure.
- AI chip manufacturers have sold out their inventory for the next 18 to 24 months.
- The AI market could be entering the “trough of disillusionment” as the hype fades.
- If spending slows, it could lead to a wave of mergers and acquisitions in the industry.
The debate over an AI bubble is raging on Wall Street, but one thing is clear: companies are still spending a massive amount of money on the technology. According to the research firm Gartner, global AI spending is expected to reach $3.33 trillion in 2027.
The bulls on Wall Street argue that we are still in the early days of a technological revolution that will see companies pour billions more into AI over the next decade. The bears, however, see a dot-com-style bubble that is destined to burst.
For now, the spending spree is in full swing. The bulk of the money is going toward AI infrastructure, with companies expected to drop nearly $1.4 trillion on building out the backbone of their AI futures in 2_026 alone. AI chip manufacturers have reportedly sold out their inventory for the next 18 to 24 months.
“There’s no problem with the spending,” Gartner analyst John-David Lovelock told Yahoo Finance. “We are still seeing love letters being written, you know, ‘Please, sell me your equipment.'”
However, Lovelock also warned that the AI market could be entering what Gartner calls the “trough of disillusionment.” This is the point in a hype cycle when the initial excitement starts to fade, and reality sets in. If the technology doesn’t live up to its lofty promises, some companies may start to pull back on their spending.
We’ve seen this happen before with other emerging technologies like virtual reality and the metaverse. If the same thing happens with AI, it could lead to a wave of mergers and acquisitions as smaller, less-established companies struggle to survive.
For now, though, the money is still flowing, and the AI party is still going strong.
