Top tech companies will invest $600 billion in AI this year. Sounds excessive, right? It’s not. 

Getting an ROI On Your $600 Billion

$600 billion is about $4,000 per American worker. If half those workers are white-collar folks who could use AI at work, that’s $8,000 per worker.

GPUs are good for around six years. To double our money, those chips need to give us an incremental $16,000 a year in productivity boost per white collar worker. That’s $2,667 a year or just $222 a month. 

Improving Productivity Adds Up Fast

Does anyone really believe we can’t get $222 a month in benefit per white collar worker from AI?

Already, AI has made software developers massively more productive.

Say the average software developer makes $150,000 and their productivity has gone up by half. That’s over $6,000 a month in productivity increase, enough to give us a whopping 28x return on our AI spend. 

Not every job category will get this much benefit. But if some workers get $6,000 a month and others get zero, the average is still quite high. 

The Coming Torrent of Ad Revenue 

This only covers B2B uses of AI. What about consumer?

Consumer AI services like ChatGPT are incredibly sticky. Put some ads in those and you have an enormous revenue stream.

Google makes over $250 billion per year in ad revenue. Given how immersive these AI services are, I expect ads served in AI products to be worth far more. 

Doing More with the Same Chips

The AI services run on these chips are getting better every day. In a couple years, the GPUs we’re buying today will be running services we can barely imagine. 

And they won’t just be chatbots. Imagine androids, communicating with data centers, working in factories and harvesting crops. 

How Much Investment is Enough?

How will we know when we’re finally over-investing in AI?

If we see the progress in AI models slow to a crawl, we would need to start examining our investments a lot more closely. We’re nowhere near that point. 

If you see major tech companies taking on too much debt, that would be another sign we’re over-investing. Oracle’s debt levels are getting a bit high, but other major tech companies have so much money that they can fund investment for many years.

Wrap-Up

We’re still in the early stages of this cycle. I expect to see trillions more in investment in AI in the next several years.

It will produce tools that massively increase our productivity. It will also entertain and engross us like never before.

I’m just excited to be a small part of it!

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