notice ‘Tis the season of excess, and no one has gone overboard like the tech industry: this year it spent an estimated $1.5 trillion on AI, a level of spending usually reserved for wartime.
Between 2001 and 2014, the wars in Iraq and Afghanistan cost the United States estimated between $1.5 and $1.7 trillion in direct spending. Global spending on AI, according to Gartner, is expected to reach nearly $1.5 trillion this year, putting the current AI boom in the same money-burning league as two major wars.
What is missing today – as in recent wars – is a reason to spend this money. Some people start asking uncomfortable questions like “When you invest all the bank’s money in perishable technology, how many years will it take to get a return on that investment?” »
Yeah. It looks like closing time for the endless buffet at the Golden Corral is near, and the waiter has just brought out the last platter of cash rangoon.
So now, with bellies full of corporate talk, banking executives who wouldn’t know a server if it fell on the tips of their wings are spewing “AI” and “agents” all over their press releases, so they can keep the gravy train going.
Consider this recent good word from Larry Feinsmith, 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 coming from a guy who attended the Wharton School and now makes more money than most of us so he can influence the business decisions of billion dollar companies. His advice: “buy more AI!”
For what? There will be enormous value…one day.
When? It’s complicated.
The real question is: how many versions of this quote did he go through before settling on this particular platitude? Or did Copilot provide him with automatic assistance?
Without AI’s help, many bankers like him would have had a terrible year, and not just when it came to writing press releases.
Torsten Slok, notoriously dour economist at Apollo Global Management said in October that there is virtually no growth in corporate capital spending “outside of AI”, while other economists have said that investment in AI is the only thing keep the United States out of a recession.
Why are companies so eager to invest money in something that, until now, has only produced business value with increasingly sophisticated chatbots?
When customers need a quick AI win, this use case is the first out of the mouths of executives at large infrastructure providers like Dell and Nvidia. Every company has optimistically predicted an AI revolution comparable to the advent of electricity, but they can’t seem to find any use for this multi-billion dollar technological terror, except for the “chatbot” and its arrival. 2025 2026, “the AI agent!”
Of course, when he’s not publicly supporting the deployment of the National Guard to San Francisco, Salesforce CEO Marc Benioff says his AI agents are already working alongside customers. If so, he has developed an outlier in an area that sees agents fail in 70% of casesaccording to a study by Carnegie Mellon University.
This makes the mess of AI agents seem more akin to the CEO putting his favorite cousin to work alongside you. If they win, you lose. If they lose, you lose.
Forrester said that The AI must put on a helmet and get to work if it wants to continue winning contracts, otherwise it risks seeing that spending pushed back, as 25% of companies surveyed are delaying their AI spending until 2027. Clients, it seemed, were beginning to notice that investments in AI had not resulted in gains relative to the upfronts that really matter in business: EBITDA, earnings before interest, taxes, depreciation and amortization.
Well, you can’t spell EBITDA without AI, but the problem is that it’s in the ITDA, not the E. They don’t teach that at Wharton. ®