The enormous investments in the AI buildout are well-documented by now. Estimates vary, but around $1 trillion in AI capital expenditure (capex) is expected this year and around $1.2 trillion set for next year, with economists at Oxford Economics tallying up cumulative projected AI investment of around $3.8 trillion from 2024 to 2028. A significant portion of this is now being debt-financed, as tech firms have burned through their large cash piles.
Given these eye-popping outlays, analysts at Goldman Sachs estimate that the hyperscalers will need to generate annual AI revenues of roughly $300 billion in the next few years to break even. Assuming hyperscalers are targeting a return on investment of 15 per cent-20 per cent, they would need to make $570-$800 billion of additional profit, Oxford Economics reckons.
