Capital Expenditure

Chinese companies proposed a record 161 GW of new coal power in 2025, even as Beijing committed to peak emissions before 2030 and phase down coal after 2025. Global Energy Monitor data shows 291 GW still in the pipeline despite clean energy meeting all net power demand growth as coal generation actually fell. The disconnect reflects local economic stimulus priorities, with coal mining companies moving downstream into power generation to lock in demand before potential restrictions. China accounted for 93% of global coal construction starts in 2024, adding 78 GW in 2025 alone while the rest of the world added just 19 GW.

Saudi Arabia's Public Investment Fund will cut foreign assets from 30% to 18% of its $925 billion portfolio as megaproject costs force a strategic retreat from global buying sprees. PIF Governor Yasir Al-Rumayyan signaled the pivot at October's Future Investment Initiative, while Neom's $1 trillion budget faces scaling back amid slower foreign investment inflows than originally projected. The kingdom is shifting focus to AI partnerships, including talks with Andreessen Horowitz on a $40 billion AI fund, as Vision 2030's delivery deadline forces hard choices between global prestige projects and domestic transformation. U.S. Equity holdings already dropped from $35 billion to $20.6 billion between end-2023 and June 2024.

The newly redesigned rocket was fueled and seconds from launch when SpaceX called a halt, marking another setback for a system the company has spent $15 billion developing. Friday's attempt represents the third-generation architecture and a crucial test for SpaceX's broader commercial strategy, which the company warned is highly dependent on Starship's success. The scrub follows a pattern of delays that have pushed back deployment timelines for Starlink's larger satellites and NASA's lunar missions.

Morgan Stanley's Asia team is calling a new industrial supercycle as the region's fixed investment heads toward $16 trillion by 2030, driven by AI infrastructure, energy transition, and defense spending. The thesis centres on hardware over software: major chipmakers' annual capex rising from $105 billion in 2025 to $250 billion by 2028, with Asia controlling the critical supply chains from TSMC's foundries to SK Hynix's memory. Unlike previous cycles built on property speculation, this one is anchored by structural technology shifts that require massive physical infrastructure.

The arithmetic is brutal: Alphabet, Amazon, Meta, and Microsoft will collectively burn through $650 billion in 2026, mostly on AI infrastructure that generates no immediate revenue. Meta hiked its capex outlook to $145 billion yesterday and promptly shed $950 billion in combined market value across the four companies. Microsoft reported a 66% quarterly jump in spending, while Amazon plans $200 billion on data centers. The scale dwarfs Belgium's GDP and makes 21 other major US firms look quaint with their combined $180 billion. Investors are finally asking the obvious question: where are the returns?

Meta stock fell 13% this week after the company raised 2026 capex guidance to $145 billion, driven by AI infrastructure and a Texas data center that ballooned from $1.5 billion to $10 billion. Legal defeats in New Mexico and Los Angeles compounded investor anxiety, while the company delayed rolling out a new AI model due to performance issues. Meta is simultaneously cutting hundreds of jobs to contain costs while pursuing what executives call "frontier ambition" in superintelligence. The 28% drop from recent highs reflects a broader reckoning: investors are no longer willing to fund massive AI bets without clear monetization timelines. Analysts still see 62% upside to $850, but that requires faith in returns years away.

Amazon raised quarterly capex to $31.4 billion, implying an annualized pace exceeding $118 billion as AWS chases AI demand. The company plans $200 billion for data centers and specialized chips, including $50 billion for US government AI infrastructure with 1.3 gigawatts of power capacity. CFO Brian Olsavsky confirmed AWS drives the largest share of spending, with elevated levels expected through 2026. Amazon issued $12 billion in bonds last year to fund the buildout, positioning against Alphabet's $85 billion capex target. The scale reflects hyperscalers' recognition that AI infrastructure is winner-take-all: fall behind now, lose the cloud wars permanently.