What is IBM CEO Arvind Krishna's view on AI data center profitability?

Arvind Krishna believes that with current costs, there is 'no way' for companies to turn a profit on their data center investments.

How much capital expenditure is being spent on AI data centers?

Arvind Krishna estimates that the global commitments for AI data centers could reach approximately $8 trillion.

What is the likelihood of current technology achieving AGI, according to Krishna?

Krishna estimates the likelihood of current technology reaching Artificial General Intelligence (AGI) to be between 0% and 1%.

Home / Business and Economy / IBM CEO: AI Data Center Costs Are Unsustainable

IBM CEO: AI Data Center Costs Are Unsustainable

2 Dec

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Summary

IBM CEO Arvind Krishna estimates $8 trillion in data center capex.
Krishna believes current costs make profit impossible for AI firms.
He estimates a 0-1% chance of current tech reaching AGI.

IBM CEO: AI Data Center Costs Are Unsustainable

IBM CEO Arvind Krishna has voiced significant concerns regarding the financial viability of the massive investments being made in AI data centers. He calculated that global commitments for computing power in the pursuit of Artificial General Intelligence (AGI) could reach as high as $8 trillion. Krishna's analysis suggests that the current cost structure for building and maintaining these facilities makes profitability virtually unattainable.

Krishna elaborated on his "napkin math," explaining that the interest alone on $8 trillion in capital expenditure would require roughly $800 billion in profit annually. Furthermore, he pointed to the rapid depreciation of AI chips, which may need replacement within five years, adding to the substantial ongoing costs. These financial hurdles cast doubt on whether the current technological trajectory can yield a positive return on investment.