So here’s the thing everyone’s dancing around while AI stocks do their rollercoaster impression: AI might be amazing at stealing your job, but it’s absolutely terrible at buying your stuff.
I know, I know. Revolutionary insight, right? But stick with me because this little paradox is about to get very expensive for the companies betting their entire future on robot overlords.
The Math That Doesn’t Add Up
Picture this: You’re a hyperscaler (fancy term for the big tech companies building AI empires). You just dropped $27 billion on a data center in Louisiana. That’s Meta money, by the way – not Monopoly money, though sometimes it’s hard to tell the difference.
Your brilliant plan? Spend trillions now, make gazillions later when every Fortune 500 company pays you millions for AI that’ll replace half their workforce.
There’s just one tiny problem: Where exactly do you think those Fortune 500 companies get their revenue? Spoiler alert – it’s not from other AI systems buying their products.
The Consumer Conundrum
Here’s where things get spicy. AI doesn’t need to buy groceries, pay rent, or impulse-purchase things on Amazon at 2 AM (we’ve all been there). But guess what still makes up 70% of the U.S. economy? Consumer spending.
So let’s follow this doom loop to its logical conclusion:
- AI replaces workers → fewer paychecks
- Fewer paychecks → less consumer spending
- Less consumer spending → companies make less money
- Companies make less money → they can’t afford those million-dollar AI contracts
- No AI contracts → hyperscalers can’t pay back their trillion-dollar infrastructure bets
It’s like economic Jenga, but with more zeros and existential dread.
The Rich Can’t Save Us (This Time)
“But wait!” you might say, “Rich people spend tons of money!” True, but even Jeff Bezos can’t eat 40 meals a day or buy enough deodorant to single-handedly prop up Procter & Gamble.
Wealth can concentrate, but consumption has physical limits. The top 10% can’t consume their way out of this one.
Don’t Panic (Yet)
Look, I’m not saying we’re all doomed to live in a post-apocalyptic wasteland where robots rule and humans fight over the last can of beans. History shows us that tech revolutions usually create new jobs we never imagined.
Plus, the next 12-18 months could still be a goldmine for AI infrastructure companies. The spending spree is real, and someone’s getting rich off all those data centers and fancy chips.
But maybe – just maybe – we should ask ourselves: Are we building the most expensive economic mousetrap in history? One where we’re both the mouse and the cheese?
Because at the end of the day, AI can optimize, automate, and replace almost anything. Except the one thing that actually matters: spending money on stuff.
Food for thought. Or should I say, food for humans – since AI doesn’t eat.