Everyone from big tech companies to startups to even sovereign nations have been spending massive sums of money to build up their AI infrastructure — with no plans to recover the investment in sight — but one of the biggest investors in the business says that this amount might be justified.
Softbank’s Masayoshi Son has said that the money that’s being spent to build AI infrastrcture is “very reasonable” given the promise of AI. “(Artificial Superintelligence) will will require 200 million chips,” he said in an interview. “The cumulative capex is 9 trillion dollars. How do you recoup (this investment)? It’s too much investment for many people’s view. (But) I say it’s still very reasonable capex. $9 trillion is not too big. Maybe too small,” he laughed.
Now $9 trillion is an eye-popping amount of money. It’s nearly 10 times the annual US defence budget, and nearly 6 times US’s annual budget deficit. It’s nearly thrice the GDP of India. But Son believes he has the numbers to back up why spending this money in building AI infrastructure would be a sound move.
“If 5 percent of GDP 10 years from now is replaced by ASI (Artificial Superintelligence), what is the number? The current five percent of global GDP is 9 trillion dollars. If the ASI can produce nine trillion dollars per year, a cumulative investment of nine trillion dollar (today) is small money. For the total 9 trillion dollars of investment you’re making now, you can recoup that 9 trillion dollars per year,” he said.
“You can depreciate one year revenue,” Son continued. “That means like 50 percent profit — 50 percent profit. It is going to be 4 trillion net income per year. This 4 trillion net income shared by four companies, will take 1 trillion profit each,” he said. Son seems to believe that the big winners in AI will be able to make massive sums from their initial investment in the coming years. He’d already put his money where his mouth is — Son’s Softbank had recently invested $500 million into OpenAI.
Now Son is known for some big bets. He’d famously bet on Yahoo and other tech stocks before the dot-com boom, and had briefly become the richest man in the world. But the dot-com crash caused his net worth to fall from $78 billion to $8 billion almost overnight, giving him the unenviable record — which he holds to this day — of losing the money amount of money ever. But then he’d bet $30 million on a little-known Chinese startup named Alibaba, which ended up being worth an astonishing $130 billion many years later. Not all of Son’s bets have paid off — his investment in WeWork had spectacularly imploded, but he has some big wins to his credit as well, including an investment in British chipmaker ARM. Son is a famous risk-taker, but if his vision of 5 percent of global GDP being generated by AI comes true in a few years, a $9 trillion investment in AI infrastructure might well be worth it.