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AI needs $6T in annual revenue to justify data centre boom

222 points · 335 comments · Betelbuddy

  1. bunderbunder · · focus · HN ↗
    They talk a bit about where the AI companies are supposed to get their revenue from. I’d like to see these analyses go a step further and talk about how those AI customers are supposed to come up with that money as well.

    For example, the article suggests $1T from enterprise productivity tooling. A quick Google suggests the global enterprise productivity tooling market is only worth about $0.1T right now.

    Do we really expect all the world’s corporations to suddenly up their annual spend by 1,000% on average? Why?

    1. Legend2440 · · focus · HN ↗
      Keep in mind wealth is not a fixed thing. If AI makes their businesses more productive, it would allow the creation of more wealth, giving them more money to pay for AI with.

      This of course hinges on the big if: does AI create wealth? I think yes, but maybe not $6 trillion of it in five years.

      1. simianwords · · focus · HN ↗
        this also happened with the internet. 6T is possible only if AI creates more wealth. same as with internet. Its not a zero sum game.
        1. Legend2440 · · focus · HN ↗
          Indeed, it is hard to say exactly how much wealth the internet creates, but it's a lot. E-commerce alone is $30 trillion industry; some estimates put the total economic value of the internet at $200 trillion or higher.

          That said, this came too late for investors in the dot-com boom. AI investors may find themselves in a similar situation.

          1. bunderbunder · · focus · HN ↗
            And, perhaps more to this particular point, it came too late for vendors behind the dotcom boom. Lucent Technologies no longer exists. WorldCom no longer exists. Cisco is a shadow of its former self, with a stock price that only recovered last year.
            1. someonebaggy · · focus · HN ↗
              Cisco is a profitable company making useful products and services. The fact that we consider that a failure is damning.
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