J.P. Morgan claimed in November that AI needed to be pulling in over $600 billion in revenue each year to even get a 10% return on the enormous expenditures on infrastructure.
Even OpenAI knows it can't afford its promises, which is why it's trying to build its own hardware.
This is a clear example of the main criticism levied at these huge AI tech firms over the past year: They are not profitable. And now it turns out they aren't even making money for America. The stock price of Nvidia might be sky high, Oracle's founder might be worth hundreds of billions, Mark Zuckerberg might have convinced the Meta board to let him run another investment project, but none of that helps U.S. GDP. Indeed, it could even be dragging it down – especially since these companies risk a recession if the bubble pops.
But that's worth the risk, as far as these companies are concerned. They have been promising for years that we're mere months away from AGI being developed. Or maybe years, but it's definitely coming. We also need to be ready for AI hacking, because that's a problem now, but don't worry, Anthropic is here to help .
As much as the AI companies want us all to pay for and use their AI tools right now, a major part of their sales pitch to investors, to consumers, to politicians, and the world at large is that all this AI investment will be worth it. The models will keep scaling in capability, and all these hundreds of billions of investment will boost productivity so much that it will make it all worth it in the end. At least, that's the ideal that AI businesses are trying to sell to investors.
But we're not seeing that yet. The economic impact is basically zero, the productivity gains are poor at best, and possibly actually make us worse workers. The scale of AI expenditure rolls on regardless, and the ongoing buildout and scale of investment will march on, toward a goalpost that's ill-defined, hedged on the promise that it'll change everything. But, for America, the economic impact might as well be nil.
Jon Martindale is a contributing writer for Tom's Hardware. For the past 20 years, he's been writing about PC components, emerging technologies, and the latest software advances. His deep and broad journalistic experience gives him unique insights into the most exciting technology trends of today and tomorrow. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-17/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Jon Martindale Freelance Writer Jon Martindale is a contributing writer for Tom's Hardware. For the past 20 years, he's been writing about PC components, emerging technologies, and the latest software advances. His deep and broad journalistic experience gives him unique insights into the most exciting technology trends of today and tomorrow.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/ai-boosted-us-economy-by-basically-zero-in-2025-says-goldman-sachs-chief-economist-we-think-theres-been-a-lot-of-misreporting-of-the-impact-that-ai-investment-had-on-gdp-growth#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.