Last year America’s biggest technology companies, including Amazon, Google and Microsoft, spent $450bn on infrastructure, much of it to power artificial intelligence. This was just an amuse-bouche. For the main course they will this year spend $900bn on chips, data centres, power and so forth, with a $1.4trn pudding to follow in 2027. To fund this feast they have borrowed more than $400bn this year. The AI capex boom is fast becoming the largest investment surge in history (see chart 1).

Ok

If superintelligence is in reach,

It is not.

A back-of-the-envelope calculation finds that covering AI capex through identifiable AI income requires revenue on the order of $2.5trn per year, more than tech’s entire combined revenue today.

Emphasis mine. This should be the fucking title.

Only a small minority of consumers seem willing to pay for personal AI subscriptions, so the real money will have to be made in selling to enterprises. Traders might use Microsoft’s Copilot to create better financial models, for instance, while schools could teach children with models from Google.

Keep deluding yourselves that anything remotely similar will happen.

At the extensive margin, roughly 20% of American firms used AI “in any…business functions” in the previous fortnight, according to the Census Bureau’s latest two-weekly survey. In Britain, official figures say about a third of firms claim to use AI, though the question is put differently. That indicates rapid technological diffusion by any standard: after all, four years ago no one used large language models.

Yet those numbers may have recently levelled off. In May economists at the Census Bureau found that “AI use remained relatively steady in many sectors over the last six months.” A survey by Jon Hartley of the University of Texas at Austin and others finds that after peaking at 46% of the workforce in mid-2025, now about 33% of people use AI at work. If, say, a third of firms across the OECD club of mostly rich countries adopt AI, then to generate $2.5trn of AI revenues the firms would have to spend about $100,000 a year on average. Is that plausible?

How about we ask how much they’re even willing to pay microslop for their shit software? Also, they’re counting on fucking 25 million fucking firms to pay 100k plus.

few firms treat AI as a core technology

Because it is not a core technology and there is nothing to indicate it will be.

Ramp, a fintech firm, finds that a fraction of firms spend thousands of dollars a month per employee on AI. The median firm’s monthly spending per worker in June, however, was $10.66. Intuit, a software firm which tracks small and medium-sized businesses in America, Britain and Canada, reports that about one in ten has paid for a dedicated AI tool.

Well, isn’t that peachy? You need 25 million firms to spend 100k each, but the majority is unwilling to pay up. Gee, I wonder why!

Total AI spending can only be guessed at, because data sources are murky and the picture is changing fast

Thanks in no small part to most media, the Economist included, doing nothing but bootlicking and never asking questions such as “How much is it actually costing? Who is going to use all the compute that is being built? Why are you all being so opaque and vague with the spending and revenue?” - you know, questions sane people would expect would be made by actual journalists.

The crux is that AI usage, as proxied by the consumption of tokens, is probably growing even more quickly than revenue.

No shit, sherlock.

That said, revenues may soon grow even more quickly, if two conditions are met. The first is that AI boosts productivity markedly. For now, there is little evidence that AI is transforming businesses.

The second is that AI adds to “intangible capital”. For firms to make the most of AI they cannot simply pay for a chatbot, but must instead rework their processes, including their staff and their use of data, from top to bottom.

I’m betting the piece will still try to end on an optimistic note because it’ll totally work out fine, you guys, these are just little details

When AI takes over the economy, you will be able to feel it.

See, when AI takes over the economy, it’s not an “if”, because it totally will, so don’t worry!