Morgan Stanley Predicts Trillion-Dollar Cloud Spending Surge

Morgan Stanley has significantly increased its forecast for global hyperscaler capital expenditures to $1.2 trillion by 2027, and up to $1.4 trillion by 2028.

This represents a substantial jump from the bank's earlier estimate of $951 billion in May 2026, which has now been revised to $1.116 trillion for 2027. Additionally, projected spending for 2026 alone was bumped from $765 billion to around $805 billion.

The majority of this hyperscaler spending is expected to stem from AI infrastructure demands, accounting for approximately 75% of the total. About 60% of the hardware capex relevant to AI involves imported components, a detail that matters in a trade environment where tariffs and supply chain disruptions can ripple through procurement timelines.

The rapid growth in demand for cloud spending has also caught the attention of crypto miners, who rely on the same GPU supply chain as AI hyperscalers. The increasing competition for Nvidia chips has created pricing pressure and allocation constraints, affecting companies like Marathon Digital, Riot Platforms, and Core Scientific that have been pivoting toward AI hosting as a revenue diversifier.

Crypto investors should take note of this convergence, as companies with existing power purchase agreements and data center shells now possess a strategic asset. Access to cheap, reliable electricity and physical rack space is becoming a competitive moat that matters as much in AI as it does in proof-of-work mining. The trillion-dollar infrastructure buildout will also require enormous amounts of electricity, which could lead to increased competition for power capacity in regions where crypto miners already operate.