Investing.com — UBS now expects artificial intelligence capital expenditure to reach nearly $1 trillion in 2026 before climbing to around $1.4 trillion in 2027, with surging memory costs accounting for most of the increase.

The bank’s updated estimates put total AI capex at $998 billion this year, almost double the $506 billion recorded in 2025. Spending is forecast to rise again to $1.447 trillion next year.

Memory is emerging as the main source of that growth as prices rise sharply.

UBS estimates memory spending will climb from $71 billion in 2025 to $367 billion this year and $923 billion in 2027. Other AI-related costs are estimated at $631 billion in 2026 before declining to $525 billion next year.

That means higher memory costs will account for about 60% of the increase in AI capex this year and more than the entire net increase in 2027, as spending on other components falls.

Across the two years, UBS calculates that roughly 90% of the nearly $1 trillion increase in AI capital expenditure between 2025 and 2027 will come from higher memory spending.

The shift would also dramatically change the composition of AI investment. Memory represented about 14% of total AI capex in 2025, according to the bank. Its share is estimated to rise to 37% this year and reach 64% in 2027.

The increase carries broader economic implications depending on whether the additional spending reflects higher memory prices or greater volumes.

UBS said price-driven increases would add relatively little to real U.S. gross domestic product. Instead, the spending would represent a transfer of income and profits toward memory producers in Asia, providing a positive contribution to GDP in those economies.

The estimates highlight how the economics of the AI investment cycle are shifting from the scale of infrastructure spending alone toward the rising cost of the components needed to support increasingly powerful computing systems.

https://uk.finance.yahoo.com/news/ubs-now-expects-ai-capex-045010389.html?shem=aimgspe,