The surge in investment in artificial intelligence is now boosting U.S. growth and pushing back the risk of recession. But without real revenue from AI services, that effect will quickly fade, Deutsche Bank said in a new note to clients.
The surge in investment in artificial intelligence is now boosting U.S. growth and pushing back the risk of recession. But without real revenue from AI services, that effect will quickly fade, Deutsche Bank said in a new note to clients.
TechSpot reports on the bank's findings. According to George Saravelos, head of currency research at Deutsche Bank, it is the "building boom" around data centers and the purchase of AI equipment that is currently holding up GDP statistics. As soon as companies slow down spending on new sites and servers, the contribution of AI to growth will weaken sharply.
Deutsche Bank emphasizes: the lion's share of the current effect is not provided by the AI products themselves, but by the people and technology that build the infrastructure. The market for AI-based applications and services has not yet shown stable and large revenues. This creates the risk of "skewing": the S&P 500 index is now half driven by technology stocks - a concentration that makes the market vulnerable to any cooling of investment in AI. Apollo's chief economist Thorsten Slack previously pointed to a similar "overload" of technologies.
Another alarming signal is the calculations of Bain & Co. The consultants estimate that by 2030, in order to cover the demand for computing for AI, the industry must generate about two trillion dollars in revenue per year. Under current business models, a gap of about eight hundred billion is created at the global level. That is, the amount of spending is growing faster than the money that AI actually brings.
Despite this, companies continue to announce megaprojects to increase computing power. TechSpot gives an example: Nvidia announced an investment of $100 billion in cooperation with OpenAI to expand infrastructure, and OpenAI talked about a network of new data centers. There are also warnings within the industry: OpenAI CEO Sam Altman admits that some investors are behaving irrationally and are suffering losses, while Baidu CEO Robin Li predicts that “99% of companies with the AI label” will not survive the inevitable pullback.
Deutsche Bank's conclusion is simple and unpleasant for the market: while the economic effect is mainly provided by the construction of "hardware", the US does look stronger than it could have been without the AI wave. But if infrastructure spending slows down even slightly, and the revenue from services does not grow quickly, the blow to growth will be noticeable - both for the labor market and for stock indices. In other words, the "airbag" with AI works, but it is temporary.
Previously, dev.ua wrote about how OpenAI CEO Sam Altman stated that artificial intelligence is one of the most important developments in a "very long time," which has created excessive hype around the AI market.
