Business capital expenditures have grown roughly 9% over the last four quarters, with more than half tied to AI infrastructure spending
For years, economists wrung their hands over a world drowning in savings with nowhere productive to go. Federal Reserve Chair Kevin Warsh says that era is over, and something very different has taken its place. Speaking at the G20 finance ministers’ meeting on August 31, 2026, Warsh described the current moment as a “global investment surge,” a deliberate contrast to the “global saving glut” narrative that dominated economic thinking after 2008.
The numbers behind the narrative #
Warsh laid the groundwork for this framing a few days earlier at the Jackson Hole Economic Policy Symposium on August 28, where he offered a data-heavy case for the shift. Business capital expenditures have grown by approximately 9% over the last four quarters, the fastest clip since 2021.
More than half of the recent capex growth traces back to artificial intelligence infrastructure, including chips, data centers, and related buildout.
S&P 500 firm profits grew by over 20% in the past year, buoyed by high margins and low market volatility, according to Warsh’s analysis at Jackson Hole.
Annualized token sales for leading AI models have surged past $100 billion, reflecting a 500% year-over-year increase.
From saving glut to spending boom #
Understanding why this matters requires a quick trip back to the mid-2000s. Former Fed Chair Ben Bernanke popularized the term “global saving glut” to explain a world where countries like China and oil exporters were accumulating massive reserves, pushing down interest rates globally and fueling asset bubbles in the process.
Warsh took the helm at the Federal Reserve in May 2026, and his emphasis on the investment surge marks a notable departure in tone from his predecessors. Where Jerome Powell spent much of his tenure navigating inflation crises and labor market puzzles, Warsh appears more focused on the structural forces reshaping capital allocation globally.
What this means for markets and monetary policy #
For equity investors, the 20%-plus profit growth among S&P 500 firms suggests corporate America is thriving, but a significant chunk of that performance is concentrated in sectors benefiting from AI tailwinds. The $100 billion annualized revenue figure for AI model token sales is particularly striking because it suggests monetization is keeping pace with investment. Previous technology cycles, from fiber optics in the late 1990s to cloud computing in the 2010s, often saw a painful gap between infrastructure spending and revenue generation.
Warsh’s willingness to name the shift publicly, and to build a data case for it at Jackson Hole before taking it to the G20 stage, suggests this isn’t a throwaway observation. It’s a framework he intends to govern by.
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