AI investment craze faces sustainability test amid soaring costs ...Middle East

Nvidia recently announced a $100 billion investment to help OpenAI build data centers as part of the ongoing AI infrastructure boom.

Investment fund Cathay Innovation head Denis Barrier confirmed investor confidence in AI as a breakthrough technology comparable to harnessing electricity.

Geopolitical tensions further fuel investment in massive data centers requiring expensive chips and enormous electrical power.

China followed with $119 billion in AI investment during the same period according to Stanford University research.

The company now stands as the world’s most valuable firm after surpassing SpaceX with a $500 billion valuation in an employee share sale deal.

This White House-backed consortium includes Softbank, Oracle, Microsoft and Nvidia as key participants.

Bernstein Research analyst Stacy Rasgon noted the OpenAI deal will likely fuel existing concerns about bubble-fueling behavior.

Unlike established tech giants with substantial cash reserves, OpenAI and competitors must creatively bridge funding gaps.

Global data center investments could cost up to $500 billion annually through 2030 according to Bain & Company analysis.

OpenAI plans to spend over $100 billion by 2029, indicating profitability remains distant.

Wedbush Securities analyst Dan Ives compares the current AI sector to 1996 during the internet boom rather than 1999 before that bubble burst.

A Silicon Valley investor acknowledged many dollars will disappear and numerous companies will fail, similar to the internet bubble experience. – AFP

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