Below are some of the most interesting things I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
STAT
“So far this year, AI capex, which we define as information processing equipment plus software has added more to GDP growth than consumers’ spending,” reports Renaissance Macro (via Luke Kawa).
LINK
The massive amount of money being poured into these projects by Big Tech represent, according to one data center expert, “an extraordinary challenge and a gamble.”
STAT
To understand just how big a challenge this is, The Financial Times reports, “America needs to find an extra 45GW for its data farms… equivalent to about 10% of all current US generation capacity, or 23 Hoover Dams.”
QUOTE
And to understand the thinking behind the gamble, Business Insider reports, “In the minds of tech CEOs, getting AI right is a binary proposition. If they get it right, they get to survive and thrive as the tectonic plates shift; if they get it wrong, it’s the end.”
CHART
As Joe Brusuelas points out, investors are making a huge gamble of their own. “Investors are anticipating a surge in productivity with the arrival of AI. But should this buoyant view fall even just a little short, there is risk that equity valuations will need to adjust lower, reflecting the fundamental condition of the real economy.”
