According to a report by Ameriprise Financial, the artificial intelligence investment boom led by major technology companies has reached a scale that rivals the historic 1840s railway mania in Britain. The analysis highlights that the current spending wave is so large that, when measured against the size of the economy, it is only eclipsed by the UK railway frenzy of that era.
The report focuses on capital expenditures for AI across the technology sector. Ameriprise projects that Amazon.com Inc (NASDAQ: AMZN), Microsoft Corp (NASDAQ: MSFT), Meta Platforms Inc (NASDAQ: META), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), and Oracle Corp (NYSE: ORCL) will collectively invest $729 billion on AI in 2026. This figure is expected to rise to approximately $1.1 trillion by 2027.
The scale of this investment is significant relative to the broader economy. AI-related capital expenditures accounted for more than one-quarter of all U.S. private fixed investment in the second quarter, according to Oxford Economics cited by Ameriprise. Cumulative AI capex has already contributed roughly 2% of U.S. GDP over the past three years, with hyperscaler investment projected to reach 2.5% of GDP next year.
The report draws a historical parallel to the railway mania, noting that transformative technology booms often peak after three to five years and can end abruptly. The second UK railway bust reportedly cut UK GDP by around 6% relative to trend by 1850, while U.S. railway company defaults surged in the 1870s following a period of heavy investment.
Ameriprise also noted that hyperscaler investment this year is approaching 50% of revenue. The combined free cash flow for this group is estimated to fall from $200 billion in 2025 to negative $40 billion this year. Oxford Economics estimates that generating a 15% to 20% return on roughly $3.8 trillion of cumulative AI investment from 2024 through 2028 would require approximately $570 billion to $800 billion in additional annual profit.
