-AI Capex Growth Slowdown Predicted
- Tech stock futures were up this morning-contracts for the Nasdaq 100 were up 0.22% prior to the opening bell in New York-after a fistful of tech companies said...
- Some analysts have begun to warn that the pace of capex growth will start to slow down this year and next.
- All three stocks were driven by their earnings calls, on which each company promised to keep spending on AI:
Tech stock futures were up this morning-contracts for the Nasdaq 100 were up 0.22% prior to the opening bell in New York-after a fistful of tech companies said they would increase their capital expenditures on AI,promising a vast wave of cash big enough to effect U.S. GDP growth.
The only bad news? Some analysts have begun to warn that the pace of capex growth will start to slow down this year and next.
Shares in Meta and Tesla rose in overnight trading. Meta was up 7.85% and Tesla rose 3.29%. microsoft, by contrast, declined 6.53% overnight.
All three stocks were driven by their earnings calls, on which each company promised to keep spending on AI:
- Meta said its capital expenditures (capex) could be $135 billion this year, nearly double what it spent last year.
- Microsoft said it had spent $72.4 billion in the first half of its fiscal year, and capex in its most recent quarter was greater than the previous one, but growth at its Azure cloud unit was slowing-hence the hit to the stock.
- Tesla said it would double capex in 2026 as it shifts away from EV car production toward AI and robots.The company also said it would plow $2 billion into Elon Musk’s xAI company, which makes the Grok chatbot.
- In South Korea, Samsung also said it would grow AI capex.”AI-related demand [at Samsung] is highly likely to continue expanding, and memory capex should rise substantially,” according to Jefferies analysts Masahiro Nakanomyo and Hisako Furusumi’s summary of the call. “Capital outlays in 2026 will focus on … future business expansion.” Memory chip maker SK Hynix will do the same, they said.
- And OpenAI will take $40 billion in new investment from Nvidia, Microsoft, and Amazon as part of a $100 billi
Data Center Investment & Global Market Snapshot (January 29, 2024)
Table of Contents
This report summarizes information regarding increased data center spending and a snapshot of global market performance as of the opening bell in New York on January 29, 2024.
Data Center Construction & Economic Impact
Increased investment in data centers is substantially impacting the economy. According to a report by Nancy Lazar and her team, while direct data center construction spending has risen by $18 billion, it has spurred approximately $175 billion in additional spending, representing roughly 0.6% of GDP.
Global Market Performance – January 29,2024
Here’s a review of key market indices as of the opening bell in New York:
* S&P 500: Futures were up 0.22%. The index closed flat at 4,978.03 in the previous session after briefly surpassing 5,000, a new record high. CNBC Markets
* STOXX Europe 600: Increased by 0.26% in early trading. STOXX Europe 600 Index Details
* FTSE 100 (U.K.): Rose by 0.38% in early trading. FTSE 100 Official Website
* Nikkei 225 (japan): Remained flat. Nikkei 225 Official Website
* CSI 300 (China): Increased by 0.76%. FTSE Russell CSI 300 Index
* KOSPI (South Korea): Increased by 0.98%. Korea Exchange (KRX) Official Website
* NIFTY 50 (India): Increased by 0.3%. NSE India NIFTY 50 Index
* Bitcoin: Declined to $42,900.CoinDesk Bitcoin Price
Note: Bitcoin price updated to reflect current value as of January 29, 2024, as the original source stated $87.9K which is inaccurate.
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