Axios: AI’s trillion-dollar risk

AI’s trillion-dollar risk
 
Illustration: Lindsey Bailey/Axios

Our financial system is leaning on load-bearing AI spending that may never pay off, Axios’ Madison Mills writes.

Big Tech companies are set to spend $700 billion on their AI ambitions this year, Goldman Sachs says — double last year’s bill.

That could swell to over $1 trillion next year, some estimates say. 

AI costs increased at four of the Big Tech companies that reported earnings last week.

Computing power is constrained while demand is at record highs, so AI costs keep rising. 

The big picture: Business AI spending is now contributing more to U.S. economic growth than consumer spending.

AI’s big spenders, meanwhile, make up nearly half of the stock market. 

There’s more AI spending we don’t even know about.

The biggest tech companies are forking over half a trillion additional dollars on data center leases not on their balance sheets, per Moody’s. 

At least one top CEO — JPMorgan Chase’s Jamie Dimon — says the AI buildout is worth every dollar.

Dimon, speaking at anAnthropic event this morning: “The technology is so powerful, it’s worth the trillion-dollar investment.” 

Yes, but: If AI doesn’t start showing results soon, Big Tech could slow down all that economically vital spending.

PitchBook’s Harrison Rolfes tells Axios: “The moment one of those hyperscalers doesn’t succeed … you break a link in the chain.

That could cause a market correction with “ripple effects to everyone else.”
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About michelleclarke2015

Life event that changes all: Horse riding accident in Zimbabwe in 1993, a fractured skull et al including bipolar anxiety, chronic fatigue …. co-morbidities (Nietzche 'He who has the reason why can deal with any how' details my health history from 1993 to date). 17th 2017 August operation for breast cancer (no indications just an appointment came from BreastCheck through the Post). Trinity College Dublin Business Economics and Social Studies (but no degree) 1997-2003; UCD 1997/1998 night classes) essays, projects, writings. Trinity Horizon Programme 1997/98 (Centre for Women Studies Trinity College Dublin/St. Patrick's Foundation (Professor McKeon) EU Horizon funded: research study of 15 women (I was one of this group and it became the cornerstone of my journey to now 2017) over 9 mth period diagnosed with depression and their reintegration into society, with special emphasis on work, arts, further education; Notes from time at Trinity Horizon Project 1997/98; Articles written for Irishhealth.com 2003/2004; St Patricks Foundation monthly lecture notes for a specific period in time; Selection of Poetry including poems written by people I know; Quotations 1998-2017; other writings mainly with theme of social justice under the heading Citizen Journalism Ireland. Letters written to friends about life in Zimbabwe; Family history including Michael Comyn KC, my grandfather, my grandmother's family, the O'Donnellan ffrench Blake-Forsters; Moral wrong: An acrimonious divorce but the real injustice was the Catholic Church granting an annulment – you can read it and make your own judgment, I have mine. Topics I have written about include annual Brain Awareness week, Mashonaland Irish Associataion in Zimbabwe, Suicide (a life sentence to those left behind); Nostalgia: Tara Hill, Co. Meath.
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