At this point, the AI economy is like a drunk guy who managed to mount a tiger. Though nothing about the current situation is ideal, there’s no clear way to hop off without ensuring certain doom at the hands of a large, angry cat.
So it goes with AI: though the ridiculous cost of data centers demands a seemingly exponential amount of capital, the rest of the economy would be in freefall without it — so better to stay atop the tiger, on the unlikely chance that this chaotic approach somehow domesticates our large furry friend.
As far as productivity goes, the great AI boom has failed to generate even a fraction of the economic returns sought by institutional investors. Despite that pesky reality, they’ve gone all-in on the tech industry, leveraging every possible asset — including the country’s retirement savings — on the biggest gamble of the 21st century.
Yet if things continue at their current pace — if we manage to stay atop the tiger — we might someday find ourselves looking back at 2026 wondering how we ever had it so good.
According to a new analysis by accounting giant PricewaterhouseCoopers (PwC) and spotted by Bloomberg, global spending on data centers could reach an astounding $31.6 trillion by 2050, with over $15 trillion of that concentrated in the US.
And that’s a middle-of-the-road prediction. If productive AI adoption happens to pick up beyond its current middling level, according to the analysis, AI spending could rise as high as $50 trillion over the next two and a half decades.
Whether that kind of spending is actually possible seems unclear. Even PwC, which takes a decidedly optimistic view of the future, is careful to condition its forecast: “although an enormous amount of funding is required to meet mounting compute needs from a widening set of users, capital should be available in sufficient quantities” (emphasis added.)
Unfortunately, it seems there’s no other choice at this point but to hold onto the tiger for dear life. As a shocking chart by the Wall Street Journal illustrates, the amount of capital spent on non-data center construction in the US has quite literally fallen off a cliff, while the capital deployed to build data centers soars into the stratosphere.
With the cost of debt swelling amidst skyrocketing inflation, it’s unclear how our inebriated jockey is going to hold his grip for the next year — let alone the far-away date of 2050.
More on data centers: Panicking Tech Execs Try to Pivot Message on AI Data Centers
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