AI 'Arms Race' Fuels Record Global Debt

- The surge to a record $348 trillion was primarily driven by governments, which added over $10 trillion in debt in the last year; the United States, China, and the euro area accounted for roughly three-quarters of that increase. - Major technology companies are projected to spend over $320 billion on AI infrastructure in 2025, with individual company capital expenditures reaching as high as $105 billion for Amazon, $93 billion for Microsoft, and $75 billion for Google. - In the U.S. defense sector, the Department of Defense's total IT budget request for fiscal year 2026 is $66 billion, with AI investment being a top priority and the Army alone seeking a 38.3% increase for artificial intelligence projects. - Despite the heavy spending, Goldman Sachs' chief economist reported that AI investment had "basically zero" impact on U.S. GDP growth in 2025, as much of the spending goes to overseas manufacturing and materials. - While mature markets hold the majority of the total debt at approximately $231.7 trillion, debt in emerging markets has climbed to a record $116.6 trillion, with their debt-to-GDP ratio hitting an all-time high of over 235%. - The scale of some AI infrastructure projects is massive, such as OpenAI's planned $500 billion datacenter complex in Texas, which is anticipated to require 1.2 gigawatts of power—enough to supply 750,000 homes. - Concerns have been raised about a potential bubble, as a significant portion of revenue growth for major AI firms stems from a circular flow of capital, where the same tech giants are both the primary customers and vendors for AI-related hardware and cloud services.