opinion It's the season for luxury, and no industry has gone overboard more than the tech industry. This year, we spent about $1.5 trillion on AI. This is a level of spending typically reserved for wartime use.
From 2001 to 2014, the wars in Iraq and Afghanistan cost the United States an estimated $1.5 trillion to $1.7 trillion in direct spending. According to Gartner, global AI spending is expected to reach nearly $1.5 trillion this year, making today's AI boom as wasteful as two major wars.
What is missing now, as in the last few wars, is the very reason to spend this money. Some people ask uncomfortable questions like, “If I invested all my money in the bank in perishable technology, how many years would it take to recoup my investment?”
yes. It seemed like Golden Corral's endless buffet was already closing time, and the waiter just brought out the last platter of Cash Rangoon.
So now, bank executives fed up with corporate talk, who wouldn't know if the servers went down, are spouting “AI” and “agents” all over their press releases so they can keep the gravy train moving.
Consider a recent quote from Larry Finesmith, head of global technology strategy, innovation and partnerships at JPMorgan Chase:
“In the age of AI and agents, the benefits and value will be enormous, but so will the complexity.”
You don't say! This is a message from a man who went to the Wharton School, now makes more money than most of us, and can influence the business decisions of multibillion-dollar companies. His advice: “Buy more AI!”
why? It will one day be of enormous value.
when? it's complicated.
The real question is how many times did he consider that quote before settling on that cliché? Or did the co-pilot give him auto-assist?
Without AI's prompting, many bankers like him would have had a terrible year, and not just when it comes to writing press releases.
Thorsten Slok, the notoriously lethargic economist at Apollo Global Management, said in October that there is basically no growth in corporate capital spending “other than AI,” but other economists say investing in AI is the only way to protect the U.S. from recession.
Why are companies willing to spend so much money on something that has historically only generated business value through flashier chatbots?
When customers need quick wins from AI, that use case is the first thing that pops out of the mouths of executives at giant infrastructure providers like Dell and Nvidia. Companies are bullishly predicting an AI revolution on par with the advent of electricity, but they can't seem to find any scary uses for this trillion-dollar technology other than “chatbots” and what's to come. 2025 2026 “AI Agent!”
Of course, Salesforce CEO Marc Benioff has not publicly supported deploying the National Guard to San Francisco, but he insists that the company's AI agents are already working with customers. If so, he would be an outlier in a field where agents fail 70 percent of the time, according to a Carnegie Mellon University study.
This makes the AI agent boondoggle look like the CEO has his favorite cousin working next to you. If they win, you lose. If they lose, you lose too.
Forrester said if AI wants to continue winning deals, it needs to put on its hard hat and get to work or risk seeing spending deferred, with 25% of companies surveyed saying they have postponed spending on AI until 2027. Customers appear to be realizing that investments in AI are not leading to the initial benefits that truly matter to their businesses, such as EBITDA, earnings before interest, taxes, depreciation and amortization.
You can't accurately represent EBITDA without AI, but the problem is that it's in ITDA, not E. Wharton doesn't teach that. ®
