AI infrastructure's all-out spending spree

Chipmakers, cloud providers, energy producers and artificial intelligence companies are all flooring the pedal on infrastructure spending to support an AI-driven world that doesn't yet exist. Investors are placing hundred-billion-dollar bets that demand for AI is about to explode, while the technology has yet to persuasively demonstrate its mass consumer appeal or its business-efficiency benefits. The AI Infrastructure Partnership announced that it was adding Nvidia and xAI as new partners in its fund, which aims to build data centers and energy facilities supporting AI, mostly in the U.S. Two key forces are driving the spending: AI euphoria and geopolitical risk. The euphoria is the tech industry's certainty that AI is destined to be the underlying technology for a new, bigger-than-ever wave of digital growth. The risk is that the AI industry is dependent on a handful of dominant monopolies—U.S.-based Nvidia (which designs chips), Taiwan-based TSMC (which manufactures chips) and Netherlands-based ASML (which makes the machines that make chips).