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‘FOMO has proven a stronger incentive than poor stock performance’: Goldman Sachs finds insecurity is a key part of the AI boom
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The numbers coming out of Wall Street’s most influential research shop tell a story that Silicon Valley would rather not hear.
Key facts
- Despite $30 billion to $40 billion in enterprise investment in generative AI, Covello cited the influential MIT Labs report, as reported by Fortune, which found that 95% of organizations were getting
- Gartner projects global IT spending to rise from $5 trillion in 2024 to $6.15 trillion in 2026
- The Goldman Sachs Global Institute, which is not part of the bank’s research arm, issued an inquisitive report titled “Tracking Trillions,” projecting roughly $7.6 trillion in cumulative AI capital
- Build the next generation of data centers at $19 million per megawatt instead of $15 million, and total data center costs balloon by more than $500 billion over the projection period
Summary
In two separate reports published in April, Goldman Sachs analysts examined the great AI infrastructure build-out from opposite ends of the telescope, one team studying how much the machine will cost to build, another studying whether the machine is working, and arrived at a rare institutional moment: two wings of a single firm arguing, simultaneously, that the machine costs more than anyone knows and produces less than anyone admits. Notably, it is not the first time Goldman has said something like this. Two years later, Covello is back with an update. Start with the cost.