Looking past risks posed by China’s DeepSeek and US president Trump’s Liberation Day tariffs, technology platforms continue their race to build faster and larger clusters of AI computing infrastructure. Morgan Stanley estimates that cloud infrastructure capital spending will increase by nearly USD 110 billion in 2025 to reach USD 412.5 billion. Notably, these forecasts exclude an expanding set of nationally sponsored and independent AI infrastructure projects around the world like the USD 100B Project Transcendence in Saudi Arabia and the EU’s EUR 200 billion AI Gigafactories & AI Development Act. Importantly for investors, this spending is increasingly being driven by usage of AI services. For instance, just two and half years after the launch of ChatGPT, OpenAI reported in June that the company had reached USD 10 billion in annualized recurring revenues up nearly fourfold year-on-year and a figure that would place the company in the top ten of all publicly listed software providers.
Source: Morgan Stanley, June 2025