What AI bubble?
Taiwan Semiconductor Manufacturing Co., the foundry behind Nvidia’s and Apple’s chips and a leading indicator for the state of the artificial intelligence market, predicted Thursday its capital spending would swell at least 27% this year, to a range of $52 billion to $56 billion.
“Moving into first quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies,” Wendell Huang, TSMC’s chief financial officer, said in a news release.
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TSMC, whose profit surged 35% to a record high and topped analysts’ estimates, is the largest dedicated contract chip manufacturer in the world, making it an obvious beneficiary of tech giants’ frenzied efforts to get ahead in the crowded field of artificial intelligence. Late last year, Amazon announced it was investing $50 billion to expand its AI and supercomputing capabilities for US government customers. Just this week, Meta CEO Mark Zuckerberg said his company was launching Meta Compute, an initiative to build out its AI infrastructure.
Counterpoint Research senior analyst Jake Lai told CNBC that 2026 will be another “breakout year” for AI server demand. “The demand for AI remains very strong, driving overall chip demand across the entire server industry,” Lai said.
The fact that TSMC leaders expect demand to continue may dispel concerns that euphoria over AI will come crashing down. But TSMC isn’t the only business signaling that companies are still willing to fork over billions of dollars for AI innovation:
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Nvidia CEO Jensen Huang said earlier this month that customer demand in China is “very high” for the chipmaker’s H200 AI chips, which President Trump officially greenlit for China-bound exports this week.
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Wall Street analysts’ consensus estimate for hyperscaler AI companies’ 2026 capital spending grew from $465 billion at the start of the third-quarter earnings season to $527 billion in December, analysts at Goldman Sachs wrote last month. And even so, “analyst estimates have consistently underestimated capex spending related to AI,” they added.
Bubble to Burst? Not everyone is convinced AI isn’t a bubble ready to pop. CNBC compiled thoughts on the potential for a bubble and its worrisomeness from 40 tech executives, analysts and experts over the past four months. The result is a chart that shows a wide range of concerns from the likes of Microsoft co-founder Bill Gates, JPMorgan CEO Jamie Dimon, Federal Reserve Chair Jerome Powell and more.
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