JP Morgan's recent infrastructure report sent ripples through the investment community: the AI industry must generate 650 billion dollars in annual revenue to deliver even a 10 percent return on the unprecedented capital expenditure expected through 2030. The bank estimates more than 5 trillion dollars will pour into data centres and AI infrastructure over the next five years—the largest capital market event in history.
The figure sounds staggering. JP Morgan contextualised it as equivalent to every iPhone user paying an extra 35 dollars monthly, or every Netflix subscriber contributing 180 dollars per month, in perpetuity. Critics have seized on this as evidence of an AI bubble, with some analysts warning the economics simply don't work.
But this analysis may be missing the forest for the trees.