Macro Markets and Machines_The Economic and Market Transformation Driven by AI_GWM report - Flipbook - Page 8
Macro, Markets, and Machines
November 2025
We are entering a similar phase today. The ongoing investment cycle, led by hyperscalers, reflects a build-out of
the infrastructure that will support future innovation (Exhibit 4). If we draw parallels to the dotcom era, the
investment cycle may still be in its early innings and have further room to run. In fact, technology spending today
is already outpacing the pace of investment seen in the 1990s (Exhibit 5).
Capital expenditures (US$ billions)
Exhibit 4 – AI-Related Capex Has Begun to Pick Up
100
140
120
80
100
60
80
60
40
40
20
20
0
0
2014
1Q20 4Q20 3Q21 2Q22 1Q23 4Q23 3Q24 2Q25
Amazon
Meta
Alphabet
Microsoft
2016
2018
2020
2022
2024
Data centre spend (US$ billions) - LHS
Note: Based on U.S. data.
Source: Bloomberg Finance LP; Scotia Wealth Management.
Exhibit 5 – U.S. Technology Investment Has Picked Up, Much Like It Did During the Dotcom Era
U.S. technology investment
250
200
150
100
Investment in information processing equipment and software
(indexed to 100 for each time period)
50
1
4
7
10
13
16
19
22
25
28
31
34
37
40
Quarters
Dotcom era (1Q90-4Q99)
AI boom (1Q23-2Q25)
Source: Bloomberg Finance LP; Scotia Wealth Management.
As we look ahead, we seem to be entering a period where different technologies will begin to build on AI, using it
as an accelerant to push innovation and breakthroughs forward in areas like automation, biotechnology, energy
systems, materials science, and digital finance.
The blockchain, for instance, is evolving beyond crypto and being used for things like financial transactions and
data verification, with AI potentially making those systems smarter and more efficient. Meanwhile, in healthcare,
AI may be able to improve diagnostics, drug discovery, and clinical trial simulations. In materials and
manufacturing, it may be applied to design new compounds, batteries, and semiconductors faster than ever
before. And in energy, AI-fuelled optimization could make grids more efficient.
Scotia Wealth Management
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