"Though Meta, Amazon, Microsoft, Google, and Tesla are expected to have spent some $560 billion on AI development by the beginning of next year, their collective revenue from AI comes in at a paltry $35 billion. In the first half of 2025, the Atlantic notes, business spending on AI added more to GDP growth in the United States than all consumer spending combined."
"Still, managers across industries are being pressured to show financial gains from the tech, even when the software isn't delivering. That's causing companies to do some creative accounting with their staff, laying off workers or slowing down hiring to inflate AI's numbers. As the Atlantic highlights, this is leading to the very real possibility of a rupture forming in the broader economy, where companies induce rounds of layoffs to satisfy executives, without anything to show for it in the bottom line."
"In 2024, the S&P 500 grew by an incredible 24 percent - what the investment firm Charles Schwab understatedly called a "very good year." Since 2023, nearly half the growth was clustered in just a handful of tech stocks known as the "magnificent seven": Meta, Amazon, Google, Microsoft, Nvidia, Tesla, and Apple. And as the Atlantic recently noted, the companies most heavily involved in the AI boom have yet to see that success manifest in anywhere except the stock market."
Enormous corporate investment in AI infrastructure is driving significant economic activity and materially supporting US GDP growth. A small group of tech giants concentrated much of recent stock market gains while AI-related revenue remains minimal compared with spending. Firms are projected to spend roughly $560 billion on AI development while collecting only about $35 billion in AI revenue, creating a large gap between investment and returns. Many deployed AI systems underperform in real workplace settings, leaving revenue elusive. Managers face pressure to show financial gains, prompting layoffs and hiring slowdowns that could amplify unemployment and systemic economic risk.
Read at Futurism
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