The Trillion-Dollar Problem at the Heart of the AI Boom
Take your pick of alarmist projections about the future of the global economy from top tech leaders. Monzo’s founder, Tom Blomfield, reckons unemployment will surge over the next five years as more and more human output is replaced by AI. Elon Musk reckons it will be near 100 per cent in a decade. But projections are one thing. What is actually happening on the ground right now? I’ve been sent…
The rise of artificial intelligence (AI) is causing alarm among global tech leaders, with some predicting significant job losses and others estimating the expense at trillions of dollars. However, what is happening on the ground right now is different. A study by Capital on Tap, a major UK SME lender, found that while AI adoption has increased dramatically among small businesses, the spending on AI services still accounts for only a fraction of the total card transactions processed.
The median spending on AI tools is £75.60 per small business, while the average is £288. Despite this, AI tools make up only 0.1% of the total card spending processed by Capital on Tap, which translates to just £4 billion a year in the UK, less than a tenth of the turnover of Tesco. This amount is in line with other estimates of annual global AI spending, ranging between £100 billion and £150 billion.
While AI spending is expected to increase as the biggest AI providers raise prices for their models, it will need to grow significantly to make the infrastructure investments made by leading AI firms pay off.
Written by urgent.news from OilPrice's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
