Checkbooks are wide open in AI country. Maybe too wide.
Some numbers from recent weeks:
- xAI → raised $10 billion (July) after $6 billion (December)
- Meta → $14.3 billion for Scale AI; additional hires with salaries up to $10 million each
- Thinking Machines Lab → $2 billion seed funding (largest ever)
- OpenAI → $40 billion funding round (March) at $300 billion valuation
The current reality?
- GenAI market prediction by Gartner: $644 billion - but only 10% of that for software and services - the actual AI
- OpenAI: $10 billion revenue, $5 billion losses
👉 Visionary forecasting to raise money cannot replace the need for sustainable business models that must underly huge investments.
Of course, companies like BCG advocate for massive transformation, as "leading companies allocate (…) their AI investments to reshape key functions and invent new offerings rather than smaller-scale, productivity-focused initiatives."
☝ What they miss: digitalization through AI has never been one single, game-changing moonshot investment. It's many small wins - the data foundations, iterative improvements, infrastructure that actually scales.
Is this AI investment frenzy justified, or just blowing up a bubble?