Investors Split Over Whether the $730 Billion AI Buildout Can Earn Returns

Major technology companies are expected to spend more than $730 billion on AI this year, putting the returns on that investment at the center of debate.

The debate centers on whether AI infrastructure marks an early stage of a technology shift or a speculative bubble.

Gene Munster, co-founder and managing partner of Deepwater Asset Management, argued that investors underestimate how early the AI shift remains. He was optimistic that AI spending could exceed Wall Street’s longer-term expectations and argued that industry growth could extend beyond current leaders such as Nvidia and Intel. Munster previously spent 21 years at Piper Sandler.

George Noble, a veteran investor who previously ran the Fidelity Overseas Fund, argued that companies have yet to show adequate returns on spending for chips and data centers. He compared the buildout with the shale industry’s capital-spending boom and projected that hyperscaler earnings would turn negative by 2030.

The debate echoes an earlier review of AI bubble risks. By Monday’s close, the Nasdaq-100 had dropped more than 10% from its Oct. 6 peak, a decline that put the index in correction territory.