FOBO Is The New FOMO — And It's Supercharging The AI Capex Cycle
Forget fear of missing out. JPMorgan says the dominant force behind the next wave of AI spending is FOBO — Fear of Becoming Obsolete. And it's pushing both governments and corporations to spend faster, bigger, and earlier than expected.
- Track AI stocks via the IVES ETF here.
Unlike prior tech cycles driven by optimism, this one is driven by survival. Enterprises and policymakers increasingly see AI as critical infrastructure, not discretionary investment — setting the stage for another year of capex upside surprises.
From Hype To Survival
JPMorgan argues AI spending is no longer about chasing innovation leaders. It's about avoiding strategic irrelevance. Companies fear falling behind on productivity, automation, and decision-making capabilities — a risk that compounds quickly once competitors adopt AI at scale.
That mindset explains why AI investment remains resilient despite macro uncertainty, tighter financial conditions, and lingering bubble concerns.
Read Also: JPMorgan Warns: AI Hype Has Peaked — 2026 Is About Profits
Capex Keeps Surprising
JPMorgan expects AI-related capital expenditure in 2026 to exceed expectations again, driven by persistent shortages in compute, power, and infrastructure. Supply-demand imbalances are forcing buyers to commit earlier and spend more aggressively, especially in data centers and advanced compute.
Governments are also stepping in, viewing AI capacity as a national competitiveness issue rather than a private-sector luxury.
Funding Looks Fine — For Now
Balance sheets across leading AI spenders remain healthy, giving companies room to fund near-term buildouts. JPMorgan notes that while funding pressure could rise over the long term, the current investment curve appears manageable — allowing spending momentum to continue uninterrupted.
That dynamic keeps the AI capex cycle alive even as skepticism grows around valuation and returns.
Monetization Comes Next
FOBO-driven spending is now shifting toward monetization. JPMorgan expects 2026 to bring more concrete examples of revenue generation and cost savings, particularly in labor-intensive sectors that have yet to reflect AI efficiencies in estimates.
AI spending isn't slowing because it can't. Falling behind simply costs too much.
Read Next:
Photo: Shutterstock