Trillions of dollars rest on the answer. The figures are staggering: an estimated $2.9tn (2.2tn) being spent on datacentres, the central nervous systems of AI tools; the more than $4tn stock market capitalisation of Nvidia, the company that makes the chips powering cutting-edge AI systems; and the $100m signing-on bonuses offered by Mark Zuckerberg's Meta to top engineers at OpenAI, the company behind ChatGPT.
Of the five hyperscalers-which include Amazon, Google, Microsoft, and Meta-Oracle is the only one with negative free cash flow. Its debt-to-equity ratio has surged to 500 percent, far higher than Amazon's 50 percent and Microsoft's 30 percent, according to JPMorgan. While all five companies have seen their cash-to-assets ratios decline significantly in recent years amid a boom in spending, Oracle's is by far the lowest, JPMorgan found.
As the Washington Post observed in newreporting on the AI bubble, speculative investment into AI development is now the dominant force driving the US economy. By the numbers, the US GDP has grown at a rate of 1.6 percent so far this year, on pace to hit the 2.8 percent growth it achieved in 2024. That's all well and good on paper, except for the troubling fact that two-thirds of that growth came from AI, per WaPo 's analysis.
