A friend sent me this new Bain Capital study on the growth required to match the current levels of capital expenditure on AI, essentially breaking down the cost of the data center and other associated build outs. It’s an interesting document, not simply for the number-crunching and the predictions, but as a document in the more literary and analytic sense. Needless to say, Bain isn’t coming at this from any “boo capitalism!”/”this is insane lol” viewpoint. But the conclusions aren’t that far from the “this is insane lol” position. It’s very much, “hey! we can do this” but also, “um … wow, there’s quite a lot to do.”

The broad stroke numbers are these. The study says that to keep up with the current levels of capital expenditures AI will need to become a $6 trillion dollar market by 2031. (To give some perspective on that number, a recent Gartner study predicted that global IT spending will be just under $6.4 trillion this year. So devices, hardware, software, services, kind of everything.) It then posits that we can see the beginnings of, with some level of out-year predictability, something on the order of a $1.5 trillion market — which would be made up of a greatly expanded consumer market (Claude apps, ChatGPT, etc.) of between $200 and $400 billion and then an enterprise market (software, sales, marketing, business optimization) of between $1 and $1.4 trillion. So we’re left with about $4.5 trillion to go. That’s where the crash course in innovation comes in.