Below are some of the most interesting things I came across this week.

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“So far this year, AI capex, which we define as information processing equipment plus software has added more to GDP growth than consumers’ spending”, reports Renaissance Macro (via Luke Kawa).

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The massive amount of money being poured into these projects by Big Tech represent, according to one data center expert, “an extraordinary challenge and a gamble”.

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To understand just how big a challenge this is, The Financial Times reports, “America needs to find an extra 45GW for its data farms… equivalent to about 10% of all current US generation capacity, or 23 Hoover Dams.”

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And to understand the thinking behind the gamble, Business Insider reports, “In the minds of tech CEOs, getting AI right is a binary proposition. If they get it right, they get to survive and thrive as the tectonic plates shift; if they get it wrong, it’s the end.”

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As Joe Brusuelas points out, investors are making a huge gamble of their own. “Investors are anticipating a surge in productivity with the arrival of AI. But should this buoyant view fall even just a little short, there is risk that equity valuations will need to adjust lower, reflecting the fundamental condition of the real economy.”

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