The arms race is becoming a debt race
If you think all the new investment spending pouring into the world economy right now is solely targeted at Big Tech and artificial intelligence, you’re only half right.
The arms race is evolving into a debt race, as rising defence spending among key global powers threatens to eclipse investments in technology, according to former U.S. Navy Admiral James Stavridis. The planned increase in Group of Seven (G7) defence spending over the next decade may even match the scale of investment in Big Tech and artificial intelligence.
With G7 defence spending projected to grow to 3.8 percent of GDP by 2030, it could consume a similar share of global GDP compared to AI, defence, and clean energy spending. This surge in defence spending may even surpass current estimates for annual Treasury debt servicing costs, fueling concerns about government borrowing costs.
The shift in defence spending is also affecting the technology sector, as smaller companies focus on cybersecurity, encryption, and hypersonics. The rising defence-to-debt-servicing ratio highlights the potential risks of increased instability while attempting to achieve economic goals.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
