# a16z Says AI Infrastructure Spending Now Exceeds Railroad-Era GDP Share

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/26128
Published: 2026-10-01T10:24:48.000Z
Updated: 2026-10-01T10:24:48.000Z
Section: Business

> Hyperscaler capital spending is projected to reach about $780 billion in 2026 and top $1 trillion annually beginning in 2027.

AI infrastructure investment has grown to a larger share of U.S. gross domestic product than railroad construction did during the 19th-century boom, a comparison Andreessen Horowitz (a16z) made in a video discussing its second annual State of Markets report, released Sept. 30.

Capital spending by the four major U.S. cloud providers and other hyperscalers is projected to climb from about $416 billion in 2025 to roughly $780 billion in 2026, then exceed $1 trillion annually starting in 2027. Technology companies are expected to contribute about 76% of S&P 500 earnings growth in 2026. High-tech equipment, software and research and development together make up about 55% of U.S. capital spending.

The next phase of growth includes physical industries as well as computing. Semiconductor production, power, networking, robotics and manufacturing are among the areas tied to rising AI demand. Grid electrification, defense spending, reshoring and autonomous vehicles are also driving investment in physical infrastructure.

Andreessen Horowitz said Nvidia’s B200 chips are selling very well and that A100 graphics processing units installed one or two years earlier still perform well as demand for AI computing rises.

AI use has spread across businesses, but fewer companies regularly track its results. About 69% of S&P 500 companies have deployed AI applications, and nearly 30% have cited quantifiable benefits; about 2% regularly track performance metrics. As of April, about 2% of U.S. households paid to use AI services.

Software companies face pressure to show growth and results, while claims that AI marks the end of the software industry are overstated. About 75% of software companies were profitable in 2026, but only roughly 30% were growing revenue by more than 20%.