AI’s business model is starting to look less like a revolution and more like a $6 trillion IOU. Bain says existing AI services may cover just $1.8 trillion by 2031, leaving a $4.2 trillion hole to justify the data center frenzy. Apparently the killer app is still: »please invent enough revenue before the depreciation schedule catches us!!!«
Even if AI takes off the way people hope it will, that does not mean that data center investments will pay out.
Local models exist and are a viable alternative (partially to substantially to completely) to sending every query to a centralized data center that is extracting profit from every token.
On top of that, everyone is now aware of the risks of tech dependency, and big players, the ones that would be sending their money to OpenAI or Anthropic, are the ones best able to declare their independence.
In order to make $6 trillion by 2031, every human being on earth would have to spend at least $150 per year on average.
Maybe that doesn’t sound like a lot if you’re already paying a $100 a month for a Claude max subscription or whatever, but consider that the vast majority of people don’t pay for any AI at all, and have no interest in ever paying for it.
Also, $150 is a best-case scenario where revenue is 100% profit. In actual reality, the profit margins are much, much lower, and may not even exist at all!
And that number has to be spread over 5 years since the target date to raise the 6 trillion is 2031.
750 / 5 = 150
But, like I said, that’s still just a conservative estimate that doesn’t account for the fact that the AI firms have astronomical operating costs to cover.
The$6T number is per year revenue target in 2031. 6B is a round number, but facebook has 3b monthly active users, and google ai overview has 2.5b monthly active users. baidu (no google overlap) has 644m monthly active users. So at 3b internet connected users addressable or so, its $2000/user. MAUs double count work/personal/multiple/bot accounts.
Also, there’s about 1b desk/knowledge workers in the world. = $6000/job/year
AI’s business model is starting to look less like a revolution and more like a $6 trillion IOU. Bain says existing AI services may cover just $1.8 trillion by 2031, leaving a $4.2 trillion hole to justify the data center frenzy. Apparently the killer app is still: »please invent enough revenue before the depreciation schedule catches us!!!«
The killer app is “you can’t build your own cloud because we’re hoarding all the compute”
Also many of the skills for building your private cloud have been forgotten or retired because Amazon and azure.
c/selfhosted
Even if AI takes off the way people hope it will, that does not mean that data center investments will pay out.
Local models exist and are a viable alternative (partially to substantially to completely) to sending every query to a centralized data center that is extracting profit from every token.
On top of that, everyone is now aware of the risks of tech dependency, and big players, the ones that would be sending their money to OpenAI or Anthropic, are the ones best able to declare their independence.
In order to make $6 trillion by 2031, every human being on earth would have to spend at least $150 per year on average.
Maybe that doesn’t sound like a lot if you’re already paying a $100 a month for a Claude max subscription or whatever, but consider that the vast majority of people don’t pay for any AI at all, and have no interest in ever paying for it.
Also, $150 is a best-case scenario where revenue is 100% profit. In actual reality, the profit margins are much, much lower, and may not even exist at all!
6b humans would need to spend $1000/year on average. On top of phone/computer + internet/data services. Global average spending on food/year is $1500.
We’re up to 8.3 billion people now, fam.
6 trillion / 8.3 billion = ~750
And that number has to be spread over 5 years since the target date to raise the 6 trillion is 2031.
750 / 5 = 150
But, like I said, that’s still just a conservative estimate that doesn’t account for the fact that the AI firms have astronomical operating costs to cover.
The$6T number is per year revenue target in 2031. 6B is a round number, but facebook has 3b monthly active users, and google ai overview has 2.5b monthly active users. baidu (no google overlap) has 644m monthly active users. So at 3b internet connected users addressable or so, its $2000/user. MAUs double count work/personal/multiple/bot accounts.
Also, there’s about 1b desk/knowledge workers in the world. = $6000/job/year