"Goldman Sachs Global Institute projects roughly $7.6 trillion in cumulative AI capital expenditure between 2026 and 2031, covering chips, data centers, and power infrastructure."
"Annual spending is expected to more than double over that period, from $765 billion this year to $1.6 trillion by 2031."
"James Covello, head of global equity research, has consistently questioned whether the spending on AI is producing commensurate returns, becoming more convinced of its inadequacy."
"The figures provided by Goldman Sachs are baseline estimates and are extremely sensitive to changes in underlying assumptions."
Goldman Sachs analysts have published reports indicating that the costs of AI infrastructure are significantly underestimated while the returns are overestimated. They project $7.6 trillion in cumulative AI capital expenditure from 2026 to 2031, with annual spending expected to rise from $765 billion to $1.6 trillion. Despite acknowledging some previous inaccuracies, James Covello remains convinced that the spending on AI is not yielding adequate returns, reflecting a critical view from within a firm deeply involved in financing the AI boom.
Read at Fortune
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