The American economy has split in two. There’s a rip-roaring AI economy. And there’s a lackluster consumer economy.
You see it in the economic statistics. Last quarter, spending on artificial intelligence outpaced the growth in consumer spending. Without AI, US economic growth would be meager.
You see it in stocks. In the last two years, about 60 percent of the stock market’s growth has come from AI-related companies, such as Microsoft, Nvidia, and Meta. Without the AI boom, stock market returns would be putrid.
You see it in the business data. According to Stripe, firms that self-describe as “AI companies” are dominating revenue growth on the platform, and they’re far surpassing the growth rate of any other group.
Nobody can say for sure whether the AI boom is evidence of the next Industrial Revolution or the next big bubble. All we know is that it’s happening. We can all stop talking about “what will happen if AI dominates the economy at such-and-such future date?” No, the AI economy is here and now. We’re living in it, for better or worse.
So, what exactly is the artificial intelligence boom? How did it happen, where did all this money to build AI come from, who is using the technology, and is it making people more productive? Today, in a bit of a throwback to my early blogging years, I’m going to try to walk through an FAQ with graphs to create a visual guide to the question:
How big is the AI boom?
Artificial intelligence has a few simple ingredients: computer chips, racks of servers in data centers, huge amounts of electricity, and networking and cooling systems that keep everything running without overheating.
This hardware is immensely expensive. In the last six months, the four companies investing the most in artificial intelligence—Meta, Google, Microsoft, and Amazon—spent between $100 billion and $200 billion on chips, data centers, and the like. “The most valuable tech companies are buying and building stuff at a record pace,” wrote the Wall Street Journal’s Christopher Mims.
WSJ
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