It's the age of overconsumption, but no one has surpassed the limits of the tech industry, which this year has consumed an estimated $1,5 trillion on Artificial Intelligence, a level of spending usually reserved for wartime.
Between 2001 and 2014, the wars in Iraq and Afghanistan cost the US between $1,5 and $1,7 trillion in direct spending. Global spending on Artificial Intelligence, according to Gartner, is projected to reach nearly $1,5 trillion this year, placing the current AI boom in the same category as the two great wars.
What is missing, however – as in recent wars – is a reason to spend that money. Some people are starting to ask uncomfortable questions like “When you invest all the money in the bank in a technology, how many years will it take to see a return on that investment?”
Yes. Let's do the math.
Many are fed up with corporate promises, and banking executives who didn't even know about server functions are regurgitating the terms "AI" and "agents" in all their press releases so they can keep the train of excessive consumption running.
Think the recent motto from Larry Feinsmith, head of Global Technology Strategy, Innovation & Partnerships at JPMorgan Chase:
“In the age of AI and agents, the benefits and value will be enormous, but so will the complexity.”
Don't tell us! This is coming from a guy who went to Wharton School and now makes more money than most of us so he can influence the business decisions of billion-dollar companies.
His advice: “buy more AI!”
Why There will be immense value…someday.
When? It's complicated.
The question is: How many versions of this phrase did he think of before he settled on this particular cliché? Or did Copilot help him?
Without Artificial Intelligence, many bankers like him would have a terrible year, and not just for writing press releases.
Apollo Global Management economist Torsten Slok said: stated in October that there is essentially no increase in corporate capital spending “except for AI”, while other economists report that investments in AI It's the only thing keeping the US out of a recession..
Why are companies so eager to pour money into something that has so far only generated business value with increasingly fancy chatbots?
When investors need a quick win in AI, fancy chatbots are the first thing executives at infrastructure providers like Dell and Nvidia mention. Each company is optimistically predicting an AI revolution on par with the advent of electricity. It’s just that they can’t seem to find a use for this terrifying trillion-dollar absorption beyond the terms “AI” and “agents”!
Of course, when he's not publicly advocating for the National Guard to appear in San Francisco, Salesforce CEO Marc Benioff claims that his AI agents are already working alongside customers.
If so, it's an exception in a field that sees AI agents fail 70% of the time, according to a study by Carnegie Mellon University.
This makes the mischievous AI agent look more like the CEO who puts his favorite cousin to work alongside you. If they win, you lose. If they lose, you lose.
Forrester said AI needs to put on a hard hat and get to work if it wants to continue winning deals, or it risks seeing those spending decline, with 25% of businesses surveyed delaying payments for AI until 2027. Customers, it seems, have begun to notice that investments in AI have not led to gains that really matter to businesses: EBIT, (from earnings before interest, taxes, depreciation, and amortization).
Well, you can't have EBITDA without Artificial Intelligence, and the problem is that you're stuck with ITDA, without E.
They don't teach this at Wharton.
Although the press releases will range from very select to rare, I said I'd pass...because sometimes the editors hide.
