UBS raises its forecast for AI capital expenditure to nearly $1 trillion by 2026, with 90% of the incremental spending driven by memory price hikes.

UBS’s latest estimates indicate that global AI capital expenditure will hit $998 billion in 2026, nearly doubling from $506 billion in 2025, and climbing further to $1.447 trillion in 2027. This sharp upward revision is driven primarily by the rapid surge in memory prices, rather than an overall expansion of infrastructure investment scale. Memory spending will jump from $71 billion in 2025 to $367 billion in 2026, then expand to $923 billion in 2027; over the same period, non-memory AI capital expenditure will reach roughly $631 billion in 2026, but fall back to $525 billion in 2027. The share of memory in total AI capital expenditure will rise from around 14% in 2025 to 37% in 2026, and jump further to 64% in 2027. UBS calculates that about 60% of the year-on-year increase in AI capital expenditure in 2026 comes from rising memory costs. In 2027, incremental memory spending will even exceed the total net increase in overall AI capital expenditure, as spending on other components declines during the same period. Of the nearly $1 trillion total increase between 2025 and 2027, roughly 90% is attributable to higher memory spending. UBS specifically notes that if the incremental spending is driven mainly by price hikes, its boost to U.S. real GDP will be quite limited, instead largely translating to a transfer of revenue and profits to Asian memory manufacturers, thereby delivering a more direct positive contribution to the GDP of those economies. The world’s major memory producers are concentrated in Asia, meaning that as the AI investment cycle deepens, the Asian memory industry chain may benefit more than the market previously expected. This structural shift signals that the economic driver of the AI investment cycle is moving beyond simple expansion of infrastructure scale to rising costs of key components required to support more powerful computing systems, and investors’ tracking framework for AI capital expenditure will also need to adjust accordingly.