AI hyperscalers aren’t the only big spenders fueling the economy and financial markets as the energy sector is experiencing its own capital tsunami.
Alphabet, Amazon, Meta, and Microsoft have been plowing hundreds of billions of dollars a year into AI. But the Iran war and closure of the Strait of Hormuz have highlighted another factor in capital spending.
“I do believe this is the the largest capital cycle the global economy has ever experienced—that being the energy transition,” Eli Horton, a senior portfolio manager for TCW’s equity products, told CNBC on Thursday.
He cited three drivers to the capex boom: energy security, rapid growth in electricity demand, and ongoing efforts to decarbonize.
Together, they will combine to unleash close to $5 trillion of spending by the end of this decade, Horton estimated, adding that he’s confident the trend will…
