Morgan Stanley has warned that AI capex is set to exceed the size and length of the dot‑com era telecom boom, surpassing the boom of the telecom boom. The firm expects that 40% of total Russell 1000 cash capex over 2026 to 2028, representing over $2 trillion in spending, will be driven by hyperscalers who are expected to drive about $2 billion. This could result in a significant increase in future earnings, free cash flow, and even bond issuance dependent on whether this AI bet pays off quickly enough. If it doesn't, the funding side of the story becomes more difficult. Morgan Stanley also warned that global corporate AI spending could approach $3 trillion, with roughly half of that needing to be financed across public and private credit markets. The bank's Global Investment Committee noted that the current bull market rests on the durability of AI capital expenditures, suggesting investors may be entering the later phases of this boom. If the AI capping boom fails to deliver substantial productivity gains in a timely way, it could create credit fears that could negatively impact the stock market and bond market.