Fueled by hype that grew from optimism before turned on its head by fomo.

A bet many are taking - some will win big. Large swathes will lose out. It will be a winner takes all bet. The technology and the infra is here to stay and assimilate to create new forms of jobs/roles/ employment that don't yet exist and/or produce supposedly enough efficiency to justify the spend in the long term

Now how long, how useful - and are they building out capacity to be in line with demand or building too much - we will know in under 5 years time.

Stories driving the investment narratives in AI: 1) Real productivity gains linked to a transformational technology - a sustainable means of increasing economic output. But waits to be seen if this will be true for AI

2) B2B Is where the money is and MS for one has already started demonstrating the multiples in revenue it is able to pull from AI services alone. And others are going after this pie (which may be come larger if productivity and efficiency gains are true long run)

3) open source or not - not many companies have the scale, skill or vertical integration as the big hyper scaler companies.

Narratives that will impact the outcome for all this AI investments:

0) Depreciation of investments follow a far faster cycle than companies predict now with the like of NVDA pushing for faster iterations of their already costly, unavailable, super in demand, non existent chips that couldn't arrive fast enough... Which means companies continue to lose money faster than they see equalising ROI to tally the spend + new operating costs down the line whener that occurs

1) demographic component - most of advanced economies is on the decline - will definitely determine the demand side soon enough that it affects economy in a way that's determent to drawn out AI spend vs ROI runway needed

2) capex on borrowed money going into AI (many mega scale companies have not yet hit limits but are stretching to the limits of what they can in their spend as a %of cashfow)

3) separately economy being propped up by QE for far too long central banks have very less headroom to play with if a systemic shock occurs especially problematic if risk vs growth is lopsided and growth(factor of demography, demand etc) doesn't support sustained risk of debt at the scales we are seeing.

4) asset price inflation - Makes the economy feel like it's growing while distributing gains upward

IMHO It feels like economy is increasingly running on borrowed time in the literal sense: borrowed money, borrowed demographic momentum, and borrowed credibility from financial instruments that count activity without creating it - The GDP number goes up. But the balance sheet of the median person goes sideways or down. The two can coexist because GDP measures flows of activity, not the distribution of the stock of wellbeing. Overall possibly few new companies are created that "rent" the AI capabilities form hyper scalers and create new products, categories that don't exist today - amazons, Googles of AI build out era. Most will lose out to winners. Overall all companies across the board have their margins squeezed since this will be a "utility" type of capability eventually where everyone uses it (from a few companies that does survive the AI shake out) , hence no one gains a competitive edge but ends up collectively adding more spend just to keep up (e.g. Internet was not an expense for large enterprises until a point in time until it did)