In May, Elon Musk's AI company xAI raised $6 billion from investors.

Musk launched the company just last year... But after the new round of funding, the business is already valued at $24 billion.

According to the company, the money "will be used to take xAI's first products to market, build advanced infrastructure, and accelerate the research and development of future technologies."

So a good chunk of that $6 billion will go toward the advanced semiconductors and data-center infrastructure needed to push AI forward. And for Musk, this is just the start...

Most of his wealth is in electric-vehicle maker Tesla (TSLA). Back in April, Musk posted on social media platform X that Tesla would spend around $10 billion on AI this year. And in June, he posted again saying around $3 billion to $4 billion of that sum will go toward Nvidia's (NVDA) hardware.

Whatever you think of Tesla or its founder, the Musk corporate complex alone is driving tens of billions' worth of AI spending.

You might believe AI has already moved from boom to "bubble" territory. But with this kind of spending in the works, the runway for this trend is still yearslong.

And today, I'll cover what that means for the overall stock market...

Musk's companies are spending plenty on AI. But that's small potatoes compared with other names in Big Tech...

In April, Meta Platforms (META) announced that its 2024 capital spending will be higher than expected. It now plans to spend between $35 billion and $40 billion this year, up from its previous forecast of $30 billion to $37 billion.

Of course, that won't go 100% into AI-related spending. But it's up dramatically from the $28 billion the company spent in 2023... and increased AI investment is likely the reason.

Microsoft (MSFT) is also dumping cash into this trend. It invested $13 billion in OpenAI, the company that launched ChatGPT and is leading the way in generative-AI functions.

Microsoft is also upping its capital spending. It spent $14 billion in the most recent quarter... a 79% increase over the prior year. Again, that's due in large part to the AI boom.

The company expects to keep ramping up those numbers, too. Microsoft still doesn't have enough data-center infrastructure to meet demand from customers... which means it'll keep pouring billions of dollars into AI development.

Even Alphabet (GOOGL) is joining the AI race. The company reported capital spending of $12 billion in the first quarter. That was a 91% increase versus the prior year – even more extreme than Microsoft's.

According to Alphabet's chief executive of AI, the company plans to spend more than $100 billion over time to develop the technology. That mainly means building a massive amount of data-center infrastructure, including millions of AI chips.

When you put it all together, the largest tech stocks are already pouring tens of billions of dollars into AI development. And they'll spend hundreds of billions more in the years to come. That's not even counting the smaller companies getting into the space.

This is an absolute avalanche of spending. And there's no end in sight...

Recent research from private-wealth manager Bernstein forecasts that Big Tech-related spending will top $200 billion this year. And overall spending should easily surpass $1 trillion over the next few years. A good chunk of that spending will once again be AI-related.

And that's the important thing to note... because without the AI revolution, these companies wouldn't be spending like this. They wouldn't be pumping hundreds of billions of dollars' worth of excess cash into the economy.

But AI is here. These companies are spending all that cash. And this incredible boom in spending will only mean one thing for the overall stock market... dramatically higher prices.

Yes, there will be bumps along the way. But like it or not, AI is far from a bubble. It might get there eventually, but it's not there yet.

The corporate spending we're seeing today is just the tip of the iceberg. Hundreds of billions of dollars will fuel this revolution in the years to come... which will drive growth and the stock boom that's currently underway.

So ignore the naysayers. The best move today is to stay long.

Good investing,

Brett Eversole