Morgan Stanley: AI Spending Could Hit $1.4 Trillion by 2028, But 60% Leaves the US

Morgan Stanley's (NYSE: MS) economics team just took its projection for artificial intelligence capital spending significantly higher, to $1.4 trillion by 2028. But the leakage math behind the headline number has become the more important story for US investors. On a recent episode of the firm's Thoughts on the Market podcast titled "AI Spending: A New Engine for the Global Economy," analysts highlighted that 60% of that spending will leave the US.

Details

The estimates point to massive growth in AI infrastructure spending, including data centers, specialized chips, and energy. However, the leakage of a significant portion of this spending outside the US reflects the global nature of the AI supply chain, with manufacturing and assembly hubs located in countries such as Taiwan, South Korea, and China.

Context

This report comes as major tech companies like NVIDIA (NVDA), Amazon (AMZN), Meta (META), Alphabet (GOOGL, GOOG), and Uber (UBER) race to increase their AI investments. But reliance on foreign supply chains means a large share of the economic benefits may not materialize within the US.

What It Means for Investors

For US investors, the spending leakage underscores the importance of focusing on companies with strong intellectual property or key technologies in the AI value chain, rather than investing in physical infrastructure that may be concentrated abroad. The report also highlights the need to monitor government policies that could affect cross-border investment flows.