BlackRock: AI Capex Commitments Can Sustain Thematic Investing for Two to Three Years
Claire Weston
BlackRock's Helen Jewell says U.S. tech giants will spend over $700 billion on AI infrastructure this year, rising to nearly $1 trillion by 2027 — enough committed capital to keep the AI investment theme alive for two to three more years, even as big tech turns cash-flow negative and starts borrowing.
$700 billion committed — how long can the AI theme last?
Helen Jewell, BlackRock's CIO for fundamental equities international, says the largest U.S. tech companies plan to spend over $700 billion this year on data centers, custom chips, and networking gear.
That figure climbs to nearly $1 trillion by 2027. This means → the AI theme sits on a massive capital cushion that is hard to unwind quickly.
In plain terms = the money is committed, the projects are under construction. Even if sentiment wobbles, half-built data centers don't just stop.
Big tech is borrowing to fund AI — is that normal?
Jewell acknowledges every large capex cycle eventually hits an inflection point — when markets start asking whether the spending delivers enough return for end users.
She believes AI's inflection point is still two to three years away. Tech giants shifting from positive to negative free cash flow and taking on debt is a normal phase of the capex cycle.
Her exact words: "Almost arguably, the period when they didn't need to raise and didn't need to be free-cash-flow negative was the abnormal part." This reflects a key judgment — the current "cash burn" is not a warning sign; the prior period of no cash burn was the anomaly.
What drives markets day to day right now?
Jewell attributes daily market moves to three competing forces: macro factors (oil prices, rate expectations), corporate earnings fundamentals, and positioning crowding.
These three rotate in dominance daily, making it "extremely difficult" to build durable long-term positioning.
Of the three, she sees earnings as most critical — and earnings ultimately point to AI. This means → regardless of which force drives short-term swings, the medium-term anchor remains whether AI can deliver profits.
Beyond AI, where should money go?
Jewell highlights healthcare: valuations sit at a discount to historical premiums, correlation with the AI theme is near zero, and the risk-reward profile is "attractive."
But she cautions the sector currently lacks a clear catalyst, and market sentiment favors catalyst-driven opportunities. In plain terms = healthcare stocks are cheap and diversifying, but there is no near-term spark to pull capital in.
She also names the U.K. and Latin America as interesting diversification trades. This reflects a portfolio logic — in an environment where AI concentration is extreme, deliberately seek markets uncorrelated with AI as a hedge.
Content is for reference only, not financial advice.