AI Spending to Hit 5.6% of GDP by 2030, Alger Projects

The United States is preparing for an artificial intelligence (AI) infrastructure buildout that rivals the scale of World War II mobilization. Alger, a pioneer in growth-equity investing, predicts AI-related spending could reach 5.6% of U.S. gross domestic product (GDP) by the end of the decade.

The AI investment cycle could reshape electricity demand, manufacturing capacity, and productivity gains across the economy, according to a recent market commentary from Alger. The projections come as investors increasingly look for ways to capitalize on the AI boom reshaping American industry.

To better understand the scale of this investment wave, during World War II, the U.S. war effort cost $330 billion, which translates to about $6 trillion in today’s dollars. This is close to what the U.S. is expected to invest in AI infrastructure from 2025 through 2030, according to the commentary.

What’s driving these massive investments is the sheer computing power AI requires, according to Alger. A simple AI query requires roughly 10 times more compute than a traditional Google search. A query requiring reasoning may use more than 100 times the compute of a typical search, while an AI agent booking a family trip could use 1,000 times the compute of a Google search.

Power Grid Under Pressure

That computing demand translates directly into electricity needs. U.S. electricity demand plateaued from 2005 through 2020 as the economy shifted toward services and outsourced heavy industry.

Looking ahead, U.S. power demand is now projected to grow through 2050, driven by data centers running intense AI workloads, widespread electrification, and domestic industrial manufacturing, according to U.S. Energy Information Administration projections cited in the report.

The investment surge is being reinforced by favorable economic conditions, according to Alger. The Federal Reserve has cut rates by approximately 175 basis points since September 2024, lowering borrowing costs as corporate balance sheets remain strong.

Alger believes the Alger AI Enablers & Adopters ETF (ALAI) is positioned to capture this trend through holdings in companies at the center of the AI buildout. The fund, which launched in April 2024, has returned 43.4% since its inception, as of 12/31/25 according to ETF Database.

ALAI holds NVIDIA Corp. (NVDA) at 11.4% of its assets, Microsoft Corp. (MSFT) at 9.7%, and Meta Platforms Inc. (META) at 5.7% as of 12/31/25, according to ETF Database. Additionally, the fund charges a 0.55% expense ratio.

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The following positions represented the noted percentages of ALAI assets as of December 31, 2025: Alphabet Inc.: 9.21%.

Performance data quoted represents past performance and is no guarantee of future results. DUE TO MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investment return and principal value will fluctuate so that an investor’s shares, when sold in the secondary market, may be worth more or less than original cost. Returns less than one year are not annualized. Performance does not reflect the deduction of commissions, which a broker may charge to execute a transaction in Fund shares, and an investor may incur the cost of the spread between the price at which a dealer will buy shares and the price at which a dealer will sell shares. Market performance is determined using the official closing price on the New York Stock Exchange. Market performance does not represent the returns you would receive if you traded shares at other times. To obtain performance data current to the most recent month end, please visit www.alger.com. Index performance does not represent the fund’s performance. Investors may not invest directly in an index.

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Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Companies involved in, or exposed to, AI-related businesses may have limited product lines, markets, financial resources or personnel as they face intense competition and potentially rapid product obsolescence, and many depend significantly on retaining and growing their consumer base. These companies may be substantially exposed to the market and business risks of other industries or sectors, and may be adversely affected by negative developments impacting those companies, industries or sectors, as well as by loss or impairment of intellectual property rights or misappropriation of their technology. Companies that utilize AI could face reputational harm, competitive harm, and legal liability, and/or an adverse effect on business operations as content, analyses, or recommendations that AI applications produce may be deficient, inaccurate, biased, misleading or incomplete, may lead to errors, and may be used in negligent or criminal ways. AI technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the future growth.  AI companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. A significant portion of assets will be concentrated in securities in related industries, and may be similarly affected by adverse developments and price movements in such industries. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments.  Investing in companies of small and medium capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Private placements are offerings of a company’s securities not registered with the SEC and not offered to the public, for which limited information may be available. Such investments are generally considered to be illiquid. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. ADRs and GDRs may be subject to international trade, currency, political, regulatory and diplomatic risks. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

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Before investing, carefully consider a Fund’s investment objective, risks, charges, and expenses. For a prospectus and summary prospectus containing this and other information or for a Fund’s most recent month-end performance data, visit  www.alger.com, call (800) 992-3863 (for a mutual fund) or (800) 223-3810 (for an ETF), or consult your financial advisor. Read the prospectus and summary prospectus carefully before investing. Distributor: Fred Alger & Company, LLC. All underlying series of The Alger ETF Trust listed on NYSE Arca, Inc. NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.

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