Jefferies Warns of Financial Risks in AI Infrastructure Spending

Financial services firm Jefferies reports that investor concerns regarding returns on artificial intelligence capital expenditure are likely to grow as the market leadership of Big Tech in the U.S. stock market weakens. The firm notes that the combined market capitalization share of Nvidia and the four major hyperscalers in the S&P 500 declined from 27.4% in November 2025 to 24.7%.

Major technology companies including Amazon, Alphabet, Meta, and Microsoft are projected to spend between $650 billion and $700 billion on AI build-outs in 2026. This investment, focused largely on data centers and supporting infrastructure, represents one of the largest infrastructure projects in United States history. However, Jefferies warns that financial risks are increasing as companies move from cash funding toward private credit. A Bank for International Settlements study indicates that private credit loans to AI companies could reach $300 billion to $600 billion by 2030.

This spending surge has sparked a boom or bust debate, with observers citing potential bubbles similar to the dot-com and crypto crashes. Additionally, the ambition of the U.S. government to maintain an AI lead faces domestic opposition, as at least six U.S. states have proposed measures to block the construction of new data centers.