Damo: AI capital expenditure may reach 10-15 trillion US dollars in the next 10 years

The Zhitong Finance App learned that while attending the International Financial Leaders Investment Summit, Morgan Stanley CEO Ted Pick said that capital expenditure in the field of artificial intelligence (AI) in the next 10 years may reach 10-15 trillion US dollars, consolidating the position of AI as the most significant economic transformation since the birth of the Internet. He estimates that leading mega-tech companies may deploy $800 billion to $1 trillion a year in data centers and computing investments over a period of 7-12 years. Pick described the current deployment as still in the formative stage. “We are currently in the 2nd round of 9 games.”

Pick believes that compared with stock valuations, the total cost of 10-15 trillion US dollars is huge, but compared to the market value of the S&P 500 index of about 70 trillion US dollars, it is not unreasonable. Of these, 2-3 trillion US dollars have already been implemented or put into use. He estimates that the productivity dividend brought by AI can increase the real GDP of the United States by 50-70 basis points each year.

However, PIMCO CEO Emmanuel Roman warned that the scale of AI-related financing may increase to about 10 trillion US dollars in the next 5 years, eventually reaching excessive levels. He estimates that the AI industry may generate about $2 trillion in financing requirements each year to finance capital expenses, while the US bond market is about $12 trillion.

Emmanuel pointed out that in the end, the scale of financing “will become too large”, and “sooner or later, when there will be a recession, there will be problems.” Rising US interest rates, the Middle East war, and even the Eurozone crisis may trigger a turning point. O'Hanley, Chairman and CEO of State Street Bank, said that it is currently “very difficult” to view AI as a bubble. Because market demand supports large investments, “these data centers are not built randomly; they all have actual orders behind them, and in most cases, there are real companies behind them.” He believes that the real question is whether AI will be efficient enough to make all the production capacity currently being built unnecessary in the future.