Growth in 2025 is being driven by the buildout of the underlying AI infrastructure, but there will come a day when those projects are completed.
"Once the factories have been built, will the productivity gains from AI take over?" Saravelos asked. "And how globally disseminated will those benefits be as opposed to the location of the factories themselves?"
This year, AI spending has added more to the US GDP than consumer spending itself. But the growth isn’t coming from revolutionary AI products changing how we work — it’s from a frantic buildout of data centers and chips in the hope that such products will arrive someday.
This distinction matters because once the data centers are built and the chips are installed, what happens if the promised productivity gains never arrive?
If spending wasn’t going to AI, the assumption in this chart is business would not spend on development of any kind. That’s an absurd assumption.
Bfl
"Once the factories have been built, will the productivity gains from AI take over?" Saravelos asked. "And how globally disseminated will those benefits be as opposed to the location of the factories themselves?"
Saravelos misunderstands AI.
Data centers aren’t static “factories” with a finish line. They’re in perpetual upgrade mode.
The “factory buildout then plateau” logic misreads the nature of AI infrastructure. These aren’t fixed capital goods but self-renewing cognitive engines that evolve with each new model and application.
“Deutsche Bank says AI spending may be the factor propping up the whole economy, but there are big questions about what comes next”
if true, then we’re in for a bad spell given that it’s believed that 95% of all AI investments have failed to make money ...