AI capex could hit $1.6 trillion next year, says fund manager who sees more echoes of 1998 than the dot-com bust

Core Impact Points

• A T. Rowe Price fund manager predicts AI capex could reach $1.6 trillion next year.
• The fund manager believes hyperscalers can fund their investment spending comfortably and derive high returns on that invested capital with a short payback schedule.
• This prediction echoes the 1998 tech boom rather than the dot-com bust, suggesting a more sustainable growth trajectory.
• The growing importance of AI in the US economy could lead to increased competition and innovation in the AI space.
• Massive investments in AI could raise concerns about the potential risks and challenges associated with such investments.