AI Spending Set to Reach $2.8 Trillion by 2029 Despite Fears of a Bubble Burst.

Analysts at Citigroup and Jefferies predict AI spending to reach $2.8 trillion by 2029, driven by hyperscalers like Microsoft, Meta, and Apple. Despite fears of an AI bubble bursting, infrastructure spending is expected to continue growing.

As the digital landscape continues to evolve, artificial intelligence (AI) spending is poised to reach unprecedented heights. According to analysts at Citigroup and Jefferies, AI spending is expected to skyrocket to $2.8 trillion by 2029, driven by significant investments from major tech companies such as Microsoft, Meta, and Apple META 2025 Stock Surge: AI‑Fueled Growth vs. Regulatory Risks – What Investors Should Know^[1]. Despite concerns about potential AI bubbles, the infrastructure spending trend is projected to remain robust.

Meta Platforms, Inc. (NASDAQ: META), the parent company of Facebook, Instagram, WhatsApp, and Reality Labs, has been a significant player in the AI investment race. In the second quarter of 2025, Meta reported a substantial 22% year-over-year (YoY) revenue growth, reaching $47.52 billion, largely driven by AI-driven ad targeting and increased user engagement . The company's AI recommendation systems have notably increased ad engagement, with ad impressions growing by 11% and average ad prices rising by 9% .

Meta's AI infrastructure investments are not limited to advertising. The company has also been pouring billions into its metaverse division, Reality Labs, and custom AI chip development. In September 2025, Meta announced the acquisition of Rivos, a silicon-design startup, to accelerate its custom AI chip program . This acquisition, valued around $2 billion, will support Meta’s Meta Training and Inference Accelerator (MTIA) chips used to train generative AI models.

While AI spending is expected to continue growing, the tech industry faces several challenges. Meta, for instance, is grappling with regulatory pressures and antitrust lawsuits. In September 2025, a U.S. federal judge dismissed a class-action antitrust lawsuit alleging Meta misled users about its data privacy practices, but the company continues to face regulatory threats, including the European Union’s Digital Markets Act (DMA) . Additionally, the metaverse division, Reality Labs, has been operating at a loss, with heavy capital expenditures expected to continue in the near term.

Despite these challenges, analysts remain bullish on Meta's long-term prospects. Stockanalysis reports that 44 analysts rate the stock as a Strong Buy, with an average price target of $826.11, a 12.5% upside from the September close . The company's robust profitability, strong AI investments, and modest valuation relative to peers make a share price of $800 or higher plausible.

In the broader tech landscape, Microsoft, Apple, and Amazon are also significantly investing in AI infrastructure. Microsoft, for example, has been developing large language models and integrating AI into its cloud services. Apple, on the other hand, has been focusing on AI-driven personalization and privacy features. Amazon has been leveraging AI to enhance its e-commerce and logistics operations.

The growing AI spending trend is expected to continue, driven by the increasing demand for AI-driven solutions across various industries. However, the tech industry must navigate regulatory challenges and ensure that AI investments yield long-term returns. As the digital landscape continues to evolve, AI spending is set to play a pivotal role in shaping the future of technology.