A post citing Goldman puts its 2027 hyperscaler spending estimate at $1.89 trillion, up 66% since the start of 2026.
Anthropic’s reported revenue grew quickly in 2025. Its operating costs were higher still. That leaves a question running through the AI spending story: how much return will all this investment produce?
AI Spending Climbs Alongside Operating Costs
The post citing Goldman raised its 2027 capital spending estimates for Alphabet from $253 billion to $507 billion, Amazon from $301 billion to $505 billion, and Microsoft from $227 billion to $373 billion. It listed Meta at $333 billion and Oracle at $174 billion.
Reuters’s review of an early Anthropic IPO prospectus put 2025 revenue at nearly $4.6 billion, up from roughly $400 million in 2024. Its reported operating loss rose from $2.98 billion to $8.06 billion. Compute and infrastructure made up $7.33 billion of its $12.65 billion in operating expenses.
The speakers discussing those figures also reported $518 billion in planned compute, cloud and infrastructure obligations over the next few years. Almost a quarter of revenue came from two customers, they said, and many large customers had no long-term commitments. The figures did not include 2026.
One loss figure needs care. The reported $42 billion loss for 2025 included a $34 billion accounting charge tied to the estimated value of financing that could become shares. The speakers questioned whether that charge would recur. The operating loss still shows costs rising above fast-growing revenue.
The speakers cited a tech-sector analyst’s estimate that the industry would need $2.4 trillion in operating cash flow by 2028, an increase of over $1.2 trillion, to earn a return on its spending. Tom Lee offered a different view: AI “could be costless innovation.” He named Nvidia, semiconductors, memory, energy and power as bottlenecks, with software companies and the Mag 7 as possible beneficiaries.
Meta Wants to Charge for an Agent
Meta introduced Muse, a personal agent app that can handle appointments and forms and monitor home security camera feeds. Meta AI chief Alexandr Wang said it will have a free tier and monthly plans of $20 or $100, depending on usage. He said Meta is exploring a cut of shopping transactions made through agents, but has no concrete plan.
Muse also asks users to trust it with sensitive tasks. Wang said the agent asks before taking sensitive actions. Users must opt out if they do not want Meta to use their agent interactions to train its models. Meta says it will remove “critical personally identifying information” from interactions used for training and is offering rewards to outside security researchers who find certain vulnerabilities.
The report on Muse said Meta recently agreed to pay nearly $17 billion to settle a case brought by state attorneys general and still faces related lawsuits. Separately, tech CEOs agreed to a voluntary group to check one another’s AI models. OpenAI canceled a model release for safety reasons. Anthropic’s reported prospectus warns that advanced AI could pose “catastrophic or existential risks to humanity.”
Yields Rise as Confidence Falls
The 10-year Treasury yield reached 5.289%, its highest since June 2007. Unusual Whales reported that the 30-year yield reached 5.612%, its highest since June 2002. Stocks closed slightly lower.
September consumer confidence fell to 81.9 from 88.6, below estimates of about 89. Two accounts said August job openings missed expectations, but differed on the number: one gave 7.228 million, while Stock Tweets cited 7.079 million.
Wednesday’s PCE inflation report is forecast at 3.7%, against the Fed’s 2% target. ADP’s private-sector jobs report is also due Wednesday, followed by September’s jobs report Friday. Public statements on rates differ too. President Trump renewed a trade threat unless the Fed cuts rates and said the U.S. should pay “the lowest interest rate in the world,” at “1 percent or a half a percent.” Fed Chair Kevin Warsh had said rate hikes could soon be considered. National Economic Council Director Kevin Hassett said the argument for holding steady was “pretty strong.”
Energy adds to the pressure. Cboe put the correlation between West Texas Intermediate crude and the 10-year Treasury yield at 65 per cent this month, close to its 66 per cent record in 1990. Oil benchmarks moved between about $70 and well over $100 a barrel during the conflict. Stock Tweets said prices later fell as export flows recovered and the U.S. released oil from its strategic reserve. European natural gas prices are up 160 per cent this year. Christine Lagarde identified rising gas prices as an inflation risk when the European Central Bank raised rates earlier this month.
A Bay Area report put the average 30-year fixed mortgage rate at 7.5%, its highest in nearly three years. The Santa Clara County Association of Realtors said buyers were adjusting budgets, bringing more cash and using less financing. A housing speaker at @clearvaluetax9382 described home sales as “frozen” and argued that government borrowing is helping keep mortgage rates high. The speaker cited a $398,596 median U.S. home sales price at the end of August, up 2.2% from a year earlier, and inventory of 1.53 million homes, below the roughly 2.4 million before the pandemic.
The Results Vary Widely
A value-investing speaker said Realty Income’s stock has been flat over five years while its dividend yield has reached 5.8%. The speaker cited interest costs rising from 550 million to 600 million over a year, with higher rates and recession as risks. Their calculation, which depended on their assumptions, suggested a 9% likely return and led them to call the stock a hold.
Travel demand gave a different picture. Carnival shares rose 13% after its quarterly results, and its CEO said the company was already half booked for 2027 at record prices. Alaska Airlines’ CEO said demand remained strong despite high fuel costs as the airline expanded its premium offerings. Micron earnings are due Wednesday.
Fidelity said the average 401(k) balance rose 10.5% from March through June. Participants in their 30s averaged $75,200; those in their 40s averaged $156,800. Including employer contributions, holders invested an average 14.4% of pay.
Charlie Bilello said Nvidia, Apple and Microsoft made up over 21% of the S&P 500, while value returned 21% this year against 6% for growth. His examples also included a negative 31% average one-year return for the hottest IPOs, a 67% fall from its March 2020 peak for a long-term zero-coupon Treasury ETF, Micron’s reported tenfold rise in a year, and large declines in Nike, Snap and Sleep Number.