The $8 trillion arms surge fuelling AI-and spooking bonds

If you think all the new investment spending pouring into the world economy right now is solely targeted at Big Tech and AI, you're only half right. According to some estimates, the planned increase in Group of Seven (G7) defence spending over the next ​decade may match it — even if the overlap between the two is now huge.
Another measure of the simultaneous stimulus to global economic activity and inflation, alongside pressure ‌on public purses and rising borrowing rates, is the eye-popping scale of planned defence spending over the coming decade. Former US Navy Admiral James Stavridis, now managing director and partner at The Carlyle Group, estimated this week that additional defence commitments from G7 governments over the next 10 years amount to some $8 trillion of additional re-armament spending on top of prior trends.
With the collective annual gross domestic product (GDP) now just over $55 trillion for the US, Japan, Germany, France, Britain, ​Italy and Canada, an $8 trillion increase over a decade amounts to almost 15% of 2026 GDP.
Stavridis points out that G7 defence spending has risen to 2.0% of GDP, its highest ​share in over 30 years, with that share projected to rise to 3.8% as soon as 2030. Across Europe alone, he said broader defence goals ⁠imply roughly €4 trillion to €5 trillion ($4.5-$5.7 trillion) of additional spending over the coming decade — rising toward €9 trillion "when adjacent infrastructure is included."