New Delhi, Nov 9 — The concerns over the sustainability of artificial intelligence-related capital expenditure spending are beginning to reshape global capital flows, potentially benefiting India, a report said on Monday.
The report from SBI Funds said artificial intelligence capital expenditure is projected to average around 3.6 per cent of US GDP between 2025 and 2032, significantly exceeding the 1.1 per cent recorded during the dotcom cycle in 2000 and 2.2 per cent during the 19th-century railroad boom.
An unprecedented boom in AI capex has supported strong growth, especially in the US even as massive borrowings by hyperscalers and tech firms pressurise long term bond yields.
“If AI revenues come into doubt, sustaining capex at current financing costs could come under question. The effects would spread to related sectors, US equities, US growth and how money is allocated across asset classes,” the report said.
“The AI trade has sucked in capital from most other assets, and any weakening of that trade should mean capital moving to other areas,” the report noted.
Crude markets have reacted sharply to the mid-term outcome with Brent plunging to sub-$100 from $115/bbl in October.
Indian indices ended higher in October amidst a sharp sell-off across emerging markets. The Nifty and the Sensex gained about 1.9 per cent and 2.7 per cent respectively for the month, making India one of the few major markets to advance.
MSCI EM fell 6.6 per cent, while the AI-linked markets of Korea and Taiwan, which had led gains earlier in the year, declined 16.2 per cent and 5.7 per cent, respectively.
Despite challenges emanating from elevated energy prices and consequent impact on inflation and fiscal, economic indicators in India have held up well, the report noted.
India’s merchandise exports rose about 23 per cent in Q3 2026, supported by the global trade recovery and India’s improved tariff position relative to peers.