IBM CEO Arvind Krishna has issued a stark warning to Big Tech investors, arguing that the AI industry’s $8 trillion (approx. RM38 trillion at RM4.75) data center spending spree offers “no way” to generate returns under today’s infrastructure economics.
IBM CEO says Profits Impossible with AGI
On The Verge’s “Decoder” podcast, Krishna’s “napkin math” reveals a one-gigawatt facility costs $80 billion (RM380 billion) to build and equip, with chips depreciating every five years. Scaling to 20-30 gigawatts per company hits $1.5 trillion (RM7.1 trillion) in capex; globally, 100 gigawatts totals $8 trillion (RM38 trillion).
At a 10% interest rate, that demands $800 billion (RM3.8 trillion) annual profits just for interest—unrealistic without AGI breakthroughs. Krishna pegs current tech’s odds of AGI at 0-1%, echoing skeptics like OpenAI’s Ilya Sutskever and Salesforce’s Marc Benioff.
Yet, he lauds AI for unlocking “trillions” in enterprise productivity via IBM’s Watsonx. Amid Nvidia stock dips from depreciation fears, Krishna urges fusion of LLMs with “hard knowledge” for viable paths forward, but remains cautiously optimistic: “Even then, I’m a ‘maybe.'”
Read the original article on Business Insider
