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Economist questions AI spending sustainability amid capital reliance

By PulseAugur Editorial · [3 sources] ·

Torsten Slok, chief economist at Apollo Global Management, expressed concerns about the sustainability of AI industry spending. He highlighted that the significant upstream margins in AI are currently funded by capital raised by less profitable segments, rather than by end-user demand. Slok questioned whether the return on investment for AI will materialize quickly enough for end customers to justify the ongoing capital expenditure. AI

IMPACT Raises questions about the long-term financial viability of AI development if end-user demand does not quickly generate sufficient returns.

RANK_REASON The cluster consists of opinion posts from an economist discussing the financial sustainability of the AI industry.

Read on Mastodon — mastodon.social →

AI-generated summary · Google Gemini · from 3 sources. How we write summaries →

Economist questions AI spending sustainability amid capital reliance

COVERAGE [3]

  1. Mastodon — mastodon.social TIER_1 English(EN) · [email protected] ·

    4 Torsten Slok, chief economist, Apollo Global Management: And therein lies the risk: will the #ROI show up for AI's end customers fast enough to sustain the sp

    4 Torsten Slok, chief economist, Apollo Global Management: And therein lies the risk: will the #ROI show up for AI's end customers fast enough to sustain the spending that is generating those upstream #margins ? #AI

  2. Mastodon — mastodon.social TIER_1 English(EN) · [email protected] ·

    3 Torsten Slok, chief economist, Apollo Global Management: The bottom line is that the most profitable part of the #AI value chain depends on the least profitab

    3 Torsten Slok, chief economist, Apollo Global Management: The bottom line is that the most profitable part of the #AI value chain depends on the least profitable part continuing to grow revenue or raise #capital . Capital can bridge the gap for a while, but not indefinitely. 🧵

  3. Mastodon — mastodon.social TIER_1 English(EN) · [email protected] ·

    2 Torsten Slok, chief economist, Apollo Global Management: The upstream margins are real, but but they are paid for out of #capital raised by the layer losing m

    2 Torsten Slok, chief economist, Apollo Global Management: The upstream margins are real, but but they are paid for out of #capital raised by the layer losing money, not out of #cash generated by end demand. That makes the 41% contingent on the -59% continuing to be financeable. …

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