AI’s Future Profit

Of course this investment will pay off.

Yes, the figures are staggering.

It’s all the buzz in mainstream financial media that Goldman Sachs projects a collective $1T investment in AI over the next five years, and questions whether it will prove rewarding.

Capital Group forecasts that Amazon, Google, Meta, and Microsoft will spend a collective $189B on AI this year alone. Most of it will go toward data centers to train and run AI models and keep themselves ready for the next phase of development. No firm wants to miss this revolution.

Doubts abound. Is it conceivable that this breakneck pace of spending will pay off? The technology is currently a mere curiosity to most users. They stop by for a peek, get wowed by the natural language capability of one or more of the models, then move on with no understanding of how current AI fits into their daily lives. Where are the products? Where are the compelling use cases? “Summarize this article” and “write my essay” go only so far, and basically nowhere near a profit zone.

Daron Acemoglu, an economist and professor at Massachusetts Institute of Technology (MIT), told Goldman Sachs researchers: “Given the focus and architecture of generative AI technology today ... truly transformative changes won’t happen quickly and few—if any—will likely occur within the next 10 years.”

Well, transformative is in the eye of the beholder and the hands of the user.

Proponents of AI point to potential biotech breakthroughs and corporate cost-cutting as ways the technology could pay for itself in the next decade. Examples of cost cutting include call center automation and insurance-claim savings. Possibly, but none of this sets anyone’s passions ablaze.

What if something closer to daily life were possible? What if AI could become so good at the help needed by ordinary people that “getting me through my days” was the product? At the moment, Apple seems to be the company most focused on this idea, with its Apple Intelligence project set to roll out later this year in partnership with OpenAI, but it would not take much of a pivot at other AI firms to pursue something similar.

And you know what? Some fast number crunching shows that it could pay. Let’s explore how.