The New Reality of the Dollar: How the AI Race is Reshaping Markets

In today’s economic landscape, Deutsche Bank's experts are warning about an emerging phenomenon that could have significant market impacts. Their special report connects three major topics—AI capital boom, asset tokenization, and the future of the dollar—that were previously considered separately. According to strategist Mallika Sachdeva, the U.S. is aggressively seeking private foreign capital for its AI development projects and fiscal deficits. Blockchain technology is serving as a key tool to widen the funding funnel. The scale of this year’s capital chase in the U.S. has no precedent—AI venture funding topped $400 billion in 2026, tripling last year's pace, with over 90% of the largest deals occurring within the country. The two leading American AI labs alone have raised a combined $217 billion this year, each valued near $1 trillion. In contrast, large tech companies like Google, Meta, Oracle, and Amazon averaged about $25 billion in investment-grade debt issuance from 2020 to 2024 but are now doing roughly ten times that amount in 2026 YTD. Microsoft has not tapped the debt markets yet, while Google recently completed its first primary equity raise since its IPO in 2004, pulling in $85 billion. SpaceX's initial public offering near $2 trillion in June was the largest debut valuation ever and reportedly earmarked 30% of the deal for retail US AI capital expenditure is projected around $800 billion this year, compared to China’s approximately $100 billion. The most crucial chart in the report highlights foreign equity inflows; Q2 2026 alone saw over $400 billion of foreign equity capital come into the U.S., well above any prior quarter and significantly outpacing index performance. Equity flows have now overtaken long-term debt flows as the main source of US capital account financing, marking a critical shift in the forex world. This change argues for increased market volatility as capital moves around global equity markets. The report calls it a 'geopolitics-to-technology funding swap': official, long-term, geopolitically motivated buyers of Treasuries are fading, and private, shorter-term, tech-driven equity buyers are taking their place.