Jared Bernstein, along with others, calculated the profits needed to rationalize AI capital investment and planned.
Source: Callum Williams via J. Bernstein.
As Bernstein points out, this amount of revenue is unlikely to happen at a time that financial markets can accept (ie, soon). A BPEA paper by Stijn Van Nieuwerburgh on the topic is here. And as it has been shown, the funding for these expenditures has migrated to more exotic, less transparent areas of the financial system.
I can’t remember where, but if you believe that profits come, you should also ask where they come from. Surveys on planned spending on AI services (very speculative I know) are smaller.
I have no doubt that there can be a big payoff for the firm or company that comes first in the race to market AI services; However, a big mess can happen from the consequences for the last company, or the next…
One interesting aspect to monitor the sector: the price for (advance) income for Mag-7 (not exactly in the AI lab; Mag-7 has profits coming from other streams) is quite low, according to history. But then, one must remember, this is forward earnings, which analysts “guess”
