Usefulness aside, I see little evidence AI is making money (profit, not revenue) for any firm whose profit doesn't come from the AI itself. I'd love to hear a counterexample. One such example would be of a hypothetical company that does translations for payment, and with AI they now are making more profit because they use AI to do the translation rather than pay a translator.
Thinking out loud, is productivity the ultimate macro benefit of AI? Should we expect macro AI investment to be a leading indicator of macro productivity gains?
For example, did macro investment in factory automation predict future productivity gains?
High growth scenario and medium growth scenario (Graph 2). I feel like an idiot asking - aren't we missing some, or at least one, scenario? Is "medium growth" for the next 4 years really the worst people can think of?
Essentially yes? The stock market operates entirely on the assumption that the lines will keep going up. As soon as they flatten the whole thing collapses onto itself.
if growth doesn't materialize, then the infrastructure build out plays out exactly like the dot com bubble. the biggest difference this time around is the earnings. if those fall, the rest crubmles.
Can't you see how much money is being pumped into this lunacy? Of course it's going to succeed. Graphs for failire are such a bummer too and are bad for the economy...
I've seen other reports that suggest the level of investment for eclipses the internet buid out in 2000 and the railroad boom more than a century earlier. I wonder if they use different ways of landing on these wildly different assessments
Yes. In inflation adjusted dollars spending on AI dwarfs previous "megaprojects". But as a fraction of GDP it's fairly modest -- comparable to the Apollo Project.
It's a sign of how much the economy has grown that under "1% of GDP for a few years" now is far bigger than "over 10% of GDP for a few decades" was in the late 1800s.
Usefulness aside, I see little evidence AI is making money (profit, not revenue) for any firm whose profit doesn't come from the AI itself. I'd love to hear a counterexample. One such example would be of a hypothetical company that does translations for payment, and with AI they now are making more profit because they use AI to do the translation rather than pay a translator.
Thinking out loud, is productivity the ultimate macro benefit of AI? Should we expect macro AI investment to be a leading indicator of macro productivity gains?
For example, did macro investment in factory automation predict future productivity gains?
BIS released a larger report in June that identified AI financing/sustainability as one of the biggest risks for the global economy:
https://www.bis.org/publ/arpdf/ar2026e.htm
pre-echos of "too big to fail"
At least if the datacenters usage crashes, we'll have cheap power from all the infra that got built.
No, we won't - there's significant capex on all that infra that will have to be paid down, and we won't have datacenters to help pay for it.
High growth scenario and medium growth scenario (Graph 2). I feel like an idiot asking - aren't we missing some, or at least one, scenario? Is "medium growth" for the next 4 years really the worst people can think of?
Financial news tends to be written for people who can fill in a lot of blanks themselves.
Can't agree more, tech and finance bros have a lot in similar except when it comes to business.
Essentially yes? The stock market operates entirely on the assumption that the lines will keep going up. As soon as they flatten the whole thing collapses onto itself.
> Is "medium growth" for the next 4 years really the worst people can think of?
At this point anything less than "medium growth" will crash the economy. We'll have bigger problems if that happens (think 2000 or 2008)
Right... So since it's a big problem, shouldn't we at least be considering it as a possibility so that we can minimize the impact?
Hmm. Perhaps too similar to pre-GFC when the ratings agencies' models never accounted for scenarios where home prices went down at the national level.
if growth doesn't materialize, then the infrastructure build out plays out exactly like the dot com bubble. the biggest difference this time around is the earnings. if those fall, the rest crubmles.
Can't you see how much money is being pumped into this lunacy? Of course it's going to succeed. Graphs for failire are such a bummer too and are bad for the economy...
I’d rather see capital invested rather than being hoarded on a corporate balance sheet with minimal utility.
Good to see GDP growing.
(January 2026)
I've seen other reports that suggest the level of investment for eclipses the internet buid out in 2000 and the railroad boom more than a century earlier. I wonder if they use different ways of landing on these wildly different assessments
Yes. In inflation adjusted dollars spending on AI dwarfs previous "megaprojects". But as a fraction of GDP it's fairly modest -- comparable to the Apollo Project.
It's a sign of how much the economy has grown that under "1% of GDP for a few years" now is far bigger than "over 10% of GDP for a few decades" was in the late 1800s.