Jan 26 (Reuters) – Spending in artificial intelligence Big corporations will continue to grow exponentially and reshape the economy, Bridgewater Associates co-chief investment officers said in a client note Monday.

AI has become a key driver of global corporate investment and a central force behind market recovery, disrupting capital spending plans across industries.

A surge in corporate spending across the AI ​​supply chain, from data center infrastructure to chips and energy, has helped lift equity markets, even as concerns grow about a potential market bubble and the sustainability of the boom.

“Simple game theory calculations make it unacceptable for these companies to agree to fall behind rivals even after a few months of progress, so one company’s decision to spend more aggressively on AI capex forces others to follow,” wrote Bob Prince, Greg Jensen and ‌Karen Karniol-Tambour, co-CIOs at the investment firm.

Global stocks were sharply mixed in the fall as growing concerns about a potential AI stock bubble weighed on sentiment and increased the risk of a sell-off. Still, Wall Street’s major indexes ended 2025 with double-digit gains, driven by strong investor demand for AI-linked stocks.

Bridgewater’s CIOs said an increase in AI capital spending could increase inflation, as higher demand pushes up the prices of items in its ecosystem, including chips and electricity.

They added that the dynamics could increase risks and create bubble-like conditions.

“Easy policy risks further accelerating speculative stock market activity and the artificial intelligence trading and investment frenzy ⁠ that is already underway, creating an environment ripe for a bubble and the risk of enabling cyclical overheating,” the note said. ​

(Reporting by Manya Saini in Bangalore; Editing by Tasim Zahid)