Artificial Intelligence profitability: A wake-up call for tech giants

While tech giants have planned massive investments in artificial intelligence ($1.4 trillion by 2027), profitability has yet to materialize and even threatens to turn into a fiasco.

The trade publication The Economist also reports that stock prices in the AI sector have fallen 15% from their June peak. The reason? Investors’ concerns, which are only growing. To make such spending profitable, it would be necessary to generate some $2,500 billion per year, which would require at least one-third of OECD (Organization for Economic Cooperation and Development) companies to invest 88,000 euros in this technology each year.

And we are still a long way from reaching that level of investment. Consumers prefer free offerings, and the use of AI in business appears to be stagnating at present. According to the European Central Bank, only one-tenth of companies in the eurozone that use artificial intelligence do so intensively. The sector’s annual revenue therefore amounts to approximately $150 to 170 billion.

For profits to finally skyrocket, AI must boost productivity and stimulate intangible capital (human, relational, structural, and informational). However, the actual replacement of employees by robots and the growth of this capital are slow to materialize, even though, as The Economist points out, when the economic shift driven by AI finally takes place, its impact will inevitably be felt.