AI Capex Boom—ish

CapEx on Computers is Booming, but not Unprecedented

Variants of this chart have been floating around social media.

Outrageous spending, tied to AI spending on computer equipment.

The data I used here is from the BEA Table 5.5.5U line 4. The latest value is $250Bln for Q2`2025. AI spending is on fire, but that seems like a lot. Take a closer look at the table. The units are SAAR. Let’s adjust. Recall that an ‘annual rate’ is not quite the same as an ‘annualized rate of growth’. To de-annualize an ‘annual rate’ we simply divide by 4.

Obviously the trajectory is the same since we did a simple linear transformation, but now we can see roughly $62bln spent in Q2`2025.

How unusual was this recent jump? Let’s transform the y-axis into log 10 to see relative growth rates.

Wow. The recent jump is nothing compared to the late 50s. That’s sensible, since that period was really the beginning of commericialization of computers. Let’s trim away this “Emergence” phase. I’ll, somewhat arbitrarily, cut off the first 10yrs of the dataset.

The recent growth is more pronounced, but is not unprecedented.

How does the recent percentage growth rate stack up against prior growth rates? I’ll use a trailing 2qtr % delta.

H1`25 spending in Computers and Peripherals has grown roughly 35%. This is a level we haven’t seen since the mid70s.

We’re at the 99th percentile of 6mth growth rates.

Conclusion: This is a sign that AI spending on computers and peripherals is indeed surging. But what we’re seeing isn’t entirely unprecedented for this industry.