With many companies investing in artificial intelligence HSBC has invested hundreds of billions of dollars in the field. HSBC CEO Georges Elhedery warned on Tuesday that there is a mismatch between investment and revenue in the sector .
At the Global Financial Leaders Investment Summit in Hong Kong, Elhedery stated that the current scale of investment presents a dilemma for companies: while AI computing power is crucial, current revenue levels may not be sufficient to justify such large-scale spending .
Morgan Stanley In July of this year, it was estimated that over the next five years, global data centers... The capacity will grow sixfold, and by the end of 2028, the cost of data centers and their hardware alone will reach $3 trillion.
A McKinsey report released in April stated that by 2030, the global data center market is projected to require $6.7 trillion in capital expenditure to meet computing power demands. Of this, data centers handling AI workloads are expected to require $5.2 trillion in capital expenditure, while data centers supporting traditional IT applications are projected to require $1.5 trillion in capital expenditure.
Elhedery stated that consumers are not yet ready to pay for AI services, and businesses will remain cautious because the productivity gains brought by AI will not be apparent within one or two years .
“These kinds of trends often take five years to show results, so gradually scaling up (AI spending) means we’ll start to see real revenue and genuine willingness to pay, but that’s likely to be later than investors expect,” he said.
William Ford, chairman and CEO of New York-based private equity firm General Atlantic, echoed Elhedery's sentiments at the same panel discussion.
He stated, " In the long run, AI will inevitably spawn entirely new industries and applications, and will also bring productivity returns, but this will take 10 or 20 years ."
Major technology companies Alphabet, Meta, Microsoft and Amazon All of them have raised their capital expenditure forecasts, and these companies now expect their total capital expenditures this year to exceed $380 billion.
OpenAI launched ChatGPT in November 2022, sparking a surge in interest in artificial intelligence . The company has since announced a partnership with Nvidia. Oracle bone script Hebotong The infrastructure agreements reached with partners are worth approximately $1 trillion.
Ford stated that the massive spending in this area demonstrates a recognition of the long-term impact of artificial intelligence . However, the industry will initially be capital-intensive; "you need to pay the price upfront for future opportunities," he said.
Ford warned that in the early stages of AI development, there could be “capital misallocation, waste of resources, overvaluation… and ‘irrational exuberance’,” adding that it is currently difficult to distinguish the winners and losers in the field.
“In reality, your current investment in AI is essentially a bet that it will become a foundational technology—like railroads or electricity—that will have a profound long-term impact and reshape the economy, but in the early years of its development, it is difficult to accurately predict exactly how it will have an impact,” he said.
U.S. stocks closed sharply lower on Tuesday after major banks warned of a potential pullback, reflecting growing concerns about overvaluation.
Goldman Sachs Both Morgan Stanley and US-based investment banks warned investors on Tuesday that global stock markets could see a pullback of over 10% over the next two years. Dragged down by widespread concerns, US stocks closed sharply lower on Tuesday, with the Nasdaq falling more than 2%. This concern also spread to Asian markets, with Japanese and South Korean stocks experiencing a sharp sell-off on Wednesday. As of this writing, South Korea's KOSPI index was down more than 6%.
(Article source: CLS)
