CIOs are telling companies that AI capex spending has gone too far
ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
- A new Bank of America survey showed exhaustion around AI capex spending.
- A record number of CIOs think that companies are overinvesting.
- They see a bubble in AI as the market's biggest tail risk for the coming year.
Silicon Valley hyperscalers made it clear during the year's first earnings week they don't plan to dial back AI capex spending. Based on new survey results, Wall Street doesn't approve.
Bank of America surveyed 162 fund managers overseeing a combined $440 billion, and a record portion of them said they think companies are "overinvesting" in capex.
Bank of America
On top of that, more CIOs are leaning in favor of decreasing capex spending. Only 20% of survey respondents have advocated for increasing capex, down from 34%.
That may be because they see AI as an increasing risk to the market's strength in 2026. 25% of survey respondents reported that they see the AI bubble as the largest tail risk, more so than inflation, geopolitical conflict or a disorderly increase in bond yields.
Meanwhile, a fair amount of investors made it clear that they believe AI hyperscaler capex poses another significant threat. 30% of survey respondents revealed that they see it as the most likely source of a systemic credit event.
A year ago, it might have seemed absurd to suggest that tech companies should spend less money on building out AI models and infrastructure. But over the last few quarters, investors have raised the bar for what they expect from companies heavily investing in AI.