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Bain: Global AI Industry Must Generate $6 Trillion in Annual Revenue by 2031 to Justify Data Center Value
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- DeepHorus
Bain & Company released a report on September 29 stating that, by 2031, the global AI industry will need to generate $6 trillion in annual revenue to provide the economic foundation for the current data-center construction boom. Existing consumer- and enterprise-oriented AI services can generate at most $1.8 trillion. The industry will therefore need to find an additional $4.2 trillion in revenue.
The additional revenue may come from automated machines, robots, and nascent markets such as drug discovery, mental health, and energy production. David Crawford, the report’s principal author and chairman of Bain’s Global Technology, Media and Telecom business, said the industry needs a wave of innovation that far surpasses that of the mobile internet and cloud computing. To sustain continued investment, global GDP growth would need to accelerate by an additional 1% per year.
Technology giants including Microsoft, Google, Amazon, Meta, and Oracle have already invested trillions of dollars in data centers to meet demand for AI computing capacity. Both the scale of data centers and their construction costs are roughly doubling every 12 to 16 months. Price increases for chips and other equipment from manufacturers such as Nvidia and SK Hynix are also driving costs higher.
As spending continues to rise, the industry’s central concern is whether AI service providers can earn returns commensurate with their investments. Critics worry that the complex web of financial interests and supply relationships between equipment manufacturers and AI developers is driving market expectations higher. Those elevated expectations, in turn, require even more capital to support them.
Bain believes that attention outside the industry is currently focused mainly on the benefits of greater employee productivity enabled by AI. Productivity gains alone will not be sufficient to cover the enormous investment required for AI infrastructure. The industry must open new markets and generate trillions of dollars in revenue.
Bain forecasts that global data-center investment will reach $5 trillion to $6.5 trillion by 2030, adding at least 150 GW of capacity. By 2031, annual infrastructure spending on data centers, computing capacity, and chip upgrades could reach as high as $1.5 trillion. Continued expansion will place additional pressure on energy supplies around the world.
Developers are also constrained by transformer shortages and limited supplies of water and electricity. Opposition from local residents is making projects even more difficult to develop. In the United States, data-center projects suspended or delayed during the quarter ending in June were worth $68 billion. Over the next decade, the goal of generating $6 trillion in annual revenue will serve as a crucial test of returns on AI investment.
