1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 30
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
Over the decades, the income share has increasingly accrued to capital owners, a trend that
could accelerate with another wave of technological innovation
70%
60%
50%
40%
30%
1960
1968
1976
1984
1992
2000
U.S. labour share of income
2008
2016
2024
2032
2040
U.S. capital share of income
Source: European Commission AMECO database, Scotia Wealth Management
In this section, we outline a potential path for how the AI-driven productivity cycle may unfold.
Phase 1: Capital Deepening
The first phase – currently underway – is the capital deepening phase. This stage is characterized
by rapid investment in compute capacity, data centres, and model training infrastructure. Indeed,
data centre spending has risen sharply in recent years, hyperscalers have meaningfully ramped
up capital expenditures, and overall technology investment has accelerated much like it did in the
past when substantial public and private outlays were directed toward laying the physical and
digital groundwork for the information superhighway.
Private data centre construction has accelerated in recent years, both in nominal and
inflation-adjusted terms
48
40
US$ billions
32
24
16
8
0
2014
2016
2018
2020
2022
2024
Private data centre construction spending (nominal)
Private data centre construction spending (real)
Source: U.S. Census Bureau, Bloomberg Finance LP, Scotia Wealth Management
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