The Half-Trillion-Dollar AI Loop | The Week
Scott Galloway and Ed Elson examine the AI investment boom, arguing big tech needs $2.5 trillion in new AI revenue to justify current spending, with no clear path there.
The gist
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Big tech has shifted from low-capital software businesses to capital-intensive manufacturers, making return on invested capital suddenly critical.
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Nvidia financing its own customers to buy chips looks like vendor financing that creates artificial demand rather than reflecting real market need.
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Galloway says productivity gains from new technology historically take decades to show up, so AI's workplace impact is likely years away.
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A weak July jobs report, down 23,000 jobs against an expected gain of 80,000, shows worker insecurity is already serious before AI fully hits.
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