Why the Iran War May Have Just Killed the AI Boom

The stock market spent the first week of the Iran war doing something strange: mostly shrugging. Oil spiked. Insurance markets effectively collapsed. Amazon had two data centers blown up. And the dipped, steadied, and the conversation shifted within days to whether the Fed might still cut in June. 

The prevailing read was: disruption, yes. Catastrophe, no. This thing will be over soon. I think that read is wrong. 

And wrong in a specific, structural way, not because the war will necessarily escalate further, but because the damage being done right now is the kind that compounds quietly. 

It hits a system that had no room left to absorb it. And it is aimed, with surprising precision, at the single largest economic bet America has ever made.

The $1.5 Trillion Bet

Add it up. Meta has pledged over $600 billion in US AI infrastructure by 2028. Apple committed $500 billion over four years. Amazon is projecting $200 billion in data center spending in 2026 alone, up from $131 billion last year. Google sits at $175 to 185 billion. Microsoft is tracking toward $105 billion for the year. 

That is roughly $1.5 trillion in committed AI capital, most of it tied to data centers, chips, and the supply chains that feed them.

These numbers have a numbing quality. They are so large they start to feel theoretical. 

But they’re not theoretical. They’re the load-bearing wall of the current bull market. 

Goldman Sachs noted in December that consensus capex estimates have been too low for two years running, with actual spending growth exceeding 50% in both 2024 and 2025 against forecasts of 20%. 

The market has priced in the spending, the compounding returns that spending is supposed to generate, the AI productivity boom, the new revenue streams, the structural advantage that justifies Nvidia trading at the multiples it does.

The whole thing is a bet. A very large, very confident, very specific bet. And that bet has one core assumption embedded in it: that the global supply chain stays roughly functional.

Annual average market capitalisation of S&P 500 companies, November 2022 and November 2024