Why the AI capex cycle may just be beginning

Despite concerns about an AI bubble similar to the dot-com era, CoBank's analysis suggests AI infrastructure spending will continue due to strong profitability across the ecosystem, robust returns on invested capital, and explosive application growth. U.S. hyperscalers spent $400 billion in 2025 with expectations to reach $700 billion in 2026, driven by Amazon, Microsoft, Meta, and Google. Key differences from the dot-com bubble include healthier cash flows, established revenue streams, and no excess capacity in AI infrastructure.