An $800 Billion Revenue Shortfall Threatens AI Future, Bain Says (bloomberg.com)
- Reference: 0179488532
- News link: https://slashdot.org/story/25/09/23/0733235/an-800-billion-revenue-shortfall-threatens-ai-future-bain-says
- Source link: https://www.bloomberg.com/news/articles/2025-09-23/an-800-billion-revenue-shortfall-threatens-ai-future-bain-says?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc1ODYwNTI5NSwiZXhwIjoxNzU5MjEwMDk1LCJhcnRpY2xlSWQiOiJUMlo2RkVHUEZIUVYwMCIsImJjb25uZWN0SWQiOiJDNTc5RDIwMDZBQjQ0RjRDODkwMTU0M0U0ODMxNkJCNiJ9.Ebqf6Uoo697s4hx3gt4df9n9TL_RyGpOEdCzK432b-E
> By 2030, AI companies will need $2 trillion in combined annual revenue to fund the computing power needed to meet projected demand, Bain said in its annual Global Technology Report [2]released Tuesday . Yet their revenue is likely to fall $800 billion short of that mark as efforts to monetize services like ChatGPT trail the spending requirements for data centers and related infrastructure, Bain predicted.
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> The report is set to raise further questions about the AI industry's valuations and business model. The increasing popularity of services such as OpenAI's ChatGPT and Google's Gemini, as well as AI efforts by companies across the planet, means demand for computing capacity and energy is rising at a rapid clip. But the savings provided by AI and companies' ability to generate additional revenue from AI is lagging behind that pace.
[1] https://www.bloomberg.com/news/articles/2025-09-23/an-800-billion-revenue-shortfall-threatens-ai-future-bain-says?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc1ODYwNTI5NSwiZXhwIjoxNzU5MjEwMDk1LCJhcnRpY2xlSWQiOiJUMlo2RkVHUEZIUVYwMCIsImJjb25uZWN0SWQiOiJDNTc5RDIwMDZBQjQ0RjRDODkwMTU0M0U0ODMxNkJCNiJ9.Ebqf6Uoo697s4hx3gt4df9n9TL_RyGpOEdCzK432b-E
[2] https://www.bain.com/insights/will-ai-disrupt-techs-most-valuable-companies-technology-report-2025/
Hype (Score:5, Insightful)
Meanwhile, all us peons down here are saying "how could this possibly add up" while great business leaders get sucked in by the hype.
Re: (Score:2)
I think it's important to understand the distribution of revenue and profit for the competing companies.
Some are like OpenAI with some revenue but huge losses, mostly from capital expenditures for computer equipment rather than operating expenses. These companies project dramatically increasing revenue but still significant losses for several years. These companies will complete for at least several more years.
Some are like the smaller companies that are struggling. They spend lots of money with minimal rev
hyperscalers... (Score:2)
Except those hundreds of $10,000,000,000 datacenter projects are going to be canceled mid-construction since there's no need to build for future demand that will never materialize. The REITs that were building the datacenters don't really care, as they still own the land and can find something else to do with it or sell the land itself for a profit.
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Motivations and evaluation criteria.
Most employees are evaluated negatively if they spend a bunch of corporate money or invest a bunch of time and human resources in an activity or asset that proves to be a failure.
The top level decision makers though are evaluate on their 'vision' and being able to take advantage of opportunities in the market place.
Look at it this way, how many people are still talking about how much MS wasted building Zune's nobody wanted, vs their early Internet, and mobile phone misses
Re: (Score:3)
> Meanwhile, all us peons down here are saying "how could this possibly add up" while great business leaders get sucked in by the hype.
No, the C-suite type didn't "get sucked in" by the hype, they jumped in to *ride* on the hype.
Regardless of outcome, those C-suites get to spend millions to billions of other people's money, for years, all the while paying themselves tens/hundreds of millions every year, to just do something related to the hype to keep the bubble going.
Yes, some years down the road, the hype crashed and burned along with the companies and all the workers there, but the C-suite just jump off with their golden parachute to th
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I guess these "great minds" are too stupid and too ignorant to actually understand anything and are just following the hype.
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Some of us remember the dotcom bubble. Those of us who were asking those same questions back then were told we didn't understand "the new economy". Of course, the bubble burst, but Amazon owns the world now.
So they don't need revenue (Score:2)
They have the potential to replace a large percentage of white collar workers. Even if it's not everyone just replacing some of them would cause wages to plummet.
The combination of replacing workers with plummeting wages because of those workers competing for jobs is worth trillions.
One of the major problems people have is they think like an employee and not like an employer.
Your boss is thinking about the entire labor market and how it affects how much he spends on labor.
It's like how when
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Can't they all just get a job picking vegetables? Apparently we need lots of those.
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Even if AI saves a lot of labor the people developing the AI have to find a way to monetize it.
For example a mechanical engineer making $150 K / year it's not uncommon to pay maybe $7500 for CATIA.
For a stock trader it's about $30K / year for a Bloomberg terminal.
Or maybe it will be like operating an MRI scanner which is $5 million to buy, and the MRI technologist who operates it makes $88K / year.
Or a mining dumptruck that costs $7M and the driver is paid $80K.
Nobody knows where this ratio will
Bad In-Roads = Borrowed Infrastructure (Score:1)
It's like sharing Netflix over a Netflix pole. The odds it lands on the eraser are 0x00000000%.
There's plenty of demand for free services... (Score:2)
... charge people even a dollar and every thing changes.
Are today's "AI" companies important to future? (Score:5, Insightful)
The Generative AI companies did their thing. It was overall very impressive, even if they massively overstated its usefulness. ChatGPT is a great early demo of this infantile, currently-almost-useless-but-very-promising tech! Now someone simply (heh) needs to get the compute requirements down two to four orders of magnitude.
If companies like OpenAI can (and want to) work on that, great! Or others can build on the work that's been done up to now. I don't think anyone will miss the current companies, though they might currently be employing people who likely have a leg up (thanks to their familiarity with the subject) on addressing the compute resources problem.
But whenever (if ever) it gets done, people are going to run it on their own machines, not your servers and jail. Lock-in has always been, and will always be, an adversarial force to be eliminated by progress. If that means OpenAI's long-term plans won't work out, well, too bad.
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"The poor downtrodden rich need our help now! It's why Thurston Howell had to rent a 3 hour cruise from 2 bumbling morons in a dodgy boat."
Let them die a natural death. (Score:2)
Millions of people ask themselves every day "how do we stop this AI shit-pocalypse?!". Perhaps we don't need to do anything after all. Perhaps all we need to do is to ride the storm, let the economy of it catch up with everyone, and then we'll get our popcorn and watch it burn with a very smug "I told you so" on our faces.
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Shades of 2008. That recession occured because banks had over-invested in mortgage backed securities. Which collapsed in value, scrubbing billions off the banks capital balances and tying up their ability to lend.
Move forward 17 years and now it will be loans for data centers, power generation and grid improvements. All backed by the banks. And all worthless now. Because the value of an asset is based on its ability to generate revenue and service debt.
At least the data centers can be used to house the n
It is called "over capacity" (Score:2)
When you have the capacity to create more, much more, stuff than you can sell, no, it is not a "revenue shortfall", it is called "over capacity".
And the right response, in a free market, to over capacity is to let the least efficient producers go bankrupt, and hence reduce the waste of producing stuff no one buys.
It is also called market consolidation, when smaller producers merge to force bigger, more efficient companies in order to survive the culling.
But, when you allow a monopoly to essentially own the
Odd AI generated slop isn't worth much! (Score:2)
AI only works if it adds to productivity. Every time I have tried it, I have spent more time trying to produce the cod, fix things and even get code to compile, than if I had just written the code myself.
I do use many automated tools I have written over the years, but they take defined blocks of(lets say record variable names) and spit out a nice blocks of add/display/modify/delete base report application code for me. That I usually don't need to spend much time debugging.
The apocalypse has been delayed. (Score:1)
Oh no. Well anyways.
"Is Enron Overpriced?" (Score:3)
Is this the equivalent headline for AI that finally pops the bubble?
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I see that we are now about to exit the Peak of inflated expectations and are now going into the Trough of disillusionment defined in the [1]Gartner hype cycle [wikipedia.org].
[1] https://en.wikipedia.org/wiki/Gartner_hype_cycle
Re: (Score:1)
It's smelled bubbly for a while already. When will this ZitGPT pop already?
Intel may actually be a good hedge stock since they don't (yet) make notable AI chips. Investors will see them as more reliable because they sell chips for actual and time-tested products. They'll look smart for not hopping on the AI bandwagon so quick, after the bursting.