"A slew of AI-focused investments have been announced recently, with OpenAI planning five new massive server farms across the US and Microsoft claiming it is building the "world's largest datacenter" in Wisconsin, for example. Management consultant biz Bain calculates the industry is heading toward creating an extra 100 gigawatts of capacity in the US by 2030 to meet demand, but it also estimates spending of $500 billion per annum on building datacenters will be needed to get there."
"Looking at the AI's topline, it says that a sustainable level of capex to revenue suggests the sector as a whole will have to be making $2 trillion in annual sales to be able to "profitably" afford this. The problem is Bain estimates that even if companies shift all of their on-premises IT budget to the cloud, and reinvest any projected savings from AI productivity gains into capital spending on new datacenters, the total amount would still come out $800 billion short."
Massive AI-focused datacenter projects are being announced, including OpenAI's five new server farms and Microsoft's claimed "world's largest datacenter" in Wisconsin. Bain calculates an extra 100 gigawatts of US capacity will be needed by 2030 and estimates $500 billion per year in datacenter building spending to meet demand. A sustainable capex-to-revenue ratio implies the AI sector must reach roughly $2 trillion in annual sales by 2030 to afford that level of investment. Even with full on-prem IT migration to cloud and reinvested AI productivity savings, projected funding remains about $800 billion short. Signs show limited ROI so far from generative AI investments.
Read at Theregister
Unable to calculate read time
Collection
[
|
...
]