Tech sector pours $1T into AI and sends customers the bill

Spending on AI infrastructure is pushing tech sector expenditure to historic levels, and enterprise customers are already footing the bill through higher software and hardware prices. John-David Lovelock, Distinguished VP Analyst at Gartner, told The Register that tech companies' own technology spending already amounted to …

[Korev]

Could you invest in my Dutch Tulips too whilst you're at it?

[Anonymous Coward]

I have an old 3D TV and glasses to swap for some of you are interested ?

[Cubbie Roo]

re: the "open question"

FTFY

The AI bubble will burst in the next two years | Professor Steve Keen

https://www.youtube.com/watch?v=biHuFPzRya4

[Groo The Wanderer - A Canuck]

Re: re: the "open question"

It has already started to pop. Have you seen how NVidia's stock is nose-diving now that investors realize that all their reported future profits and agreements rely on the AI scam continuing unabated, despite the abject failure of so-called AI to deliver actual productivity gains or any ROI at all for most people who bought into it?

The only ones who seem to really be benefiting much from its deployment are the Altmans, Bezos, and Zuckerborgs that sell the AI "services" themselves.

Open models will kill the chance of NVidia benefiting from those deals, because their customers (OpenAI, Anthropic, et. al.) will be going bankrupt when people realize they can "get it for free" by investing in some local hardware instead of paying thousands of dollars for "tokens."

[Scotthva5]

The perfect own-goal

After all this paper spending, the unchecked environmental damage, the inevitable economic recession that follows and the massive job losses that accompanies it there will be no one left with the money to buy your services.

[Jimjam3]

Seems like the money men haven’t learnt anything from the 2008 farce.

[ecofeco]

Or the last 100 years of economic disasters.

But I would expect nothing less from criminal psychopaths.

[Anonymous Coward]

Or South Seas bubble, Darien Scheme, Dutch Tulip's before.

[Michael Hoffmann]

Just wait...

... until they start sending tax payers the bills!

[Dan 55]

World hunger, clean water, education...

Just wondering how many times over that could have been solved with this money, without the planet-burning side effects.

[Phil O'Sophical]

Real Idiocy

And the UKRI (UK Research and Innovation) agency is planning to abandon real international science and close Jodrell Bank to save a mere £2.8 million so that it can splurge £1.6 billion on AI. Total madness.

[Curious]

If this "investment" in GPU and ASIC farms produces far lower profitable revenue than the speculators hoped, what level of bill increase should we expect when the costs are extracted from the 'traditional' cash cows of the tech industry?

Digital ad spend is well over 400 billion per year just in EU + US, so unless businesses put in the effort to minimise wasteful oversaturation spend here, the ad sellers have money to burn on this until the shareholders say stop.

[Anonymous Coward]

Law of unintended consequences

We're seeing pushback from our "AI is wonderful" comms.

Shareholders expect to see AI in everything, so we've found way to do that and we've got marketing going out which evangelises the move.

But now customers are looking at these comms and saying, "If you've got AI in everything and it's making you efficient and faster, well then you don't need to charge as much!".

I don't think anyone considered that customers might not want to pay the same prices if we say publicly we're super efficient and extra profitable due to AI.

[Tron]

AI has to target enterprise and government for cash.

The rest of us are finding ways to update less regularly and spend less in general as the consumer economy decays and prices rise.

Only the enterprise sector and government are gullible enough to keep throwing money in the pit. Sensible people are keeping their distance and finding ways to insulate themselves from any fallout.

Feel free to spend insane amounts of cash on xPUs with the working lifespan of hamsters. The rest of us are saving our cash and retrenching.

Oh, and the internal tech sector investment is circular. Economic theatre pour encourager les autres.

[Lee D]

I'm still of the opinion that, to pay this lot back, AI token cost has got to rise at least ten-fold to recoup their losses, pay back their loans, keep the lights on, etc.

I'm pretty sure that Copilot, ChatGPT, et al are just not going to be that useful or popular at 10 times the current cost.

[Anonymous Coward]

Considering the business generally seem to operate on minimum viable product these days it might well be that should AI costs increase much more the human will be seen as that MVP and the AI as the luxury option