Morgan Stanley CEO Pick Expects AI Capital Expenditure to Reach $10 Trillion to $15 Trillion Over the Next Decade
Morgan Stanley CEO Ted Pick expects that AI-related capital expenditure over the next decade could reach $10 trillion to $15 trillion, making it the most influential economic force since the birth of the internet. He estimates that hyperscale cloud service providers may invest $800 billion to $1 trillion annually over the next 7 to 12 years, and says current progress is equivalent to the second inning of a nine-inning game, with $2 trillion to $3 trillion in capital already committed or actually deployed. He also estimates that the productivity dividend brought by AI could raise the growth rate of U.S. real GDP by 50 to 70 basis points per year.
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Morgan Stanley's CEO gives a quantified range for AI capital expenditure over the next decade and breaks down the annual investment pace of hyperscale cloud providers, which can serve as a reference for judging the computing power investment cycle.
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Morgan Stanley CEO Ted Pick now expects that AI-related capital expenditures over the next decade could reach $10 trillion to $15 trillion, making artificial intelligence the most influential economic force since the birth of the internet.
Pick further broke down the sources of this spending. He estimates that over the next 7 to 12 years, hyperscale cloud service providers among the major tech companies could invest $800 billion to $1 trillion annually. This means that the current wave of factory construction and equipment procurement is only an early stage of a long cycle.
Still in the early stages
Regarding Wall Street's long-standing doubts about whether cloud capital expenditures can be converted into profits, Pick said he is not concerned. He used a baseball game as a metaphor for current progress: "We may only be in the second inning of a nine-inning game."
He believes that if the entire process of product development and infrastructure construction is taken into account, the $10 trillion to $15 trillion range, while large, is not unreasonable.
To help investors understand the scale of this funding, Pick compared the projected spending with the size of the stock market. He noted that the total market capitalization of the S&P 500 is about $70 trillion, so even if investment ultimately reaches $15 trillion, it remains measurable in this context. He also disclosed that $2 trillion to $3 trillion in capital has already been committed or actually deployed.
Beyond the scale of capital expenditures, Pick also assessed the sustainability of investment returns. He estimates that the productivity dividend brought by artificial intelligence could raise the growth rate of U.S. real gross domestic product (GDP) by 50 to 70 basis points per year, indicating that the benefits of this investment wave are not limited to a few tech giants but will spill over into the broader economy.
From an industry perspective, Pick's forecast amounts to an endorsement of the supply chain spanning data centers, power supply, advanced chips and networking equipment, and the long-term order visibility of relevant participants is expected to be supported. But for investors, the key question in this debate has shifted from "whether to invest in AI" to "who can recoup costs in the computing power arms race."
Pick's remarks also further extended the market discussion about whether AI capital expenditures are overheating. Some investors worry that hyperscale cloud service providers' years-long expansion of data centers and computing capacity will squeeze free cash flow and near-term profits; supporters believe that computing power has become a new factor of production, and only by laying out in advance can companies establish a competitive advantage.
The pace of capital spending and commercialization progress of major companies is expected to become a key focus in the coming earnings seasons.
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