JPMorgan Global Research is doubling down on a central thesis for 2026: the surge in AI investment is not only durable, but increasingly profitable.
In its midyear outlook, the firm points to a broadening capital expenditure cycle anchoring growth expectations. At the center is the “AI upstream” buildout—data centers, chips, and supporting infrastructure—still heavily concentrated in the U.S., which commands about 85% of AI and machine learning venture capital. Spillover benefits are expected in China, South Korea, and Taiwan, given their roles in semiconductor supply chains.
JPMorgan now estimates total global AI-related capital expenditures will reach $5.5 trillion through 2030, up from $5.1 trillion. The increase reflects higher capacity expansion and a shift in financing. The bank raised its estimate for debt financing tied to the AI buildout to $4.1 trillion, citing higher loan-to-cost ratios.
Regarding financing conditions loan-to-cost ratios average above 85%, with some exceeding 90%, reflecting both favorable credit conditions and perceived value creation. In some cases, investors are assigning outsized equity value to expansion—for example, a $15 million-per-megawatt investment translating into a $25 million increase in market capitalization.
Still, the investment cycle remains concentrated among a small group of technology companies, meaning any slowdown could have an outsized impact on industry growth.
Recent equity issuance is reinforcing balance sheets. Analysts suggest elevated leverage reflects a strategic choice: companies are financing projects with debt while conditions are favorable, preserving flexibility to deleverage later.
Credit markets will play a pivotal role. JPMorgan forecasts high-grade corporate debt will account for more than $2.1 trillion in data center financing over five years. In 2026, the bank anticipates $150 billion in U.S. hyperscaler issuance and another $100 billion equivalent abroad.
Additional financing—about $170 billion—is expected from data center and chip issuers outside the core high-grade market, though alternative channels will remain relatively small.
For JPMorgan, the conclusion is clear: AI-driven capital spending is scaling rapidly, and the economics are holding, for now. It will still be closely watched whether adoption will keep pace with the trillions being invested.
