The deeper implication: AI capex is inflationary before it becomes disinflationary. It demands power, copper, transformers, gas turbines, land, construction labor, water, chips, debt, and grid upgrades now. That pushes costs up immediately. The productivity benefit arrives later.
This is exactly the same with any new industry. Be it rail roads, shipping, Oil, whatever. But we dont need to invest half a trillion dollars for 10 gigawatts in one go with no returns. One would expect this would happen incrementally as the industry is already primed and set to consume whatever new productivity hits the market.
This is exactly the same with any new industry. Be it rail roads, shipping, Oil, whatever. But we dont need to invest half a trillion dollars for 10 gigawatts in one go with no returns. One would expect this would happen incrementally as the industry is already primed and set to consume whatever new productivity hits the market.