Bain: AI industry needs $6tn in annual revenue by 2031 to justify data centres

The global artificial intelligence industry will need to earn $6 trillion in annual revenue by 2031 to justify the capital being deployed to build data centres around the world, consulting firm Bain said in its annual global technology report published on Tuesday.

Bain estimates that existing consumer and enterprise AI services could generate as much as $1.8 trillion of that total, leaving $4.2 trillion in new revenue that still has to be created.

Where the remaining revenue could come from

The shortfall will probably be filled by nascent segments ranging from autonomous machines and robotics to emerging fields such as drug discovery, mental health and energy generation, the firm said.

"What the industry needs is a wave of innovation that will dwarf what mobile and cloud unlocked," said David Crawford, the report's lead author and chairman of Bain's global technology, media and telecommunications practice.

He added that AI infrastructure is being built well ahead of the demand curve, and that funding it sustainably will require adding roughly 1 per cent to the annual global GDP growth rate.

Spending and the strain on energy

Bain projects $5 trillion to $6.5 trillion of data centre spending by 2030, adding at least 150 gigawatts of capacity that will put further strain on national energy resources. Annual spending on AI infrastructure, spanning data centres, computing capacity and upgrades in accelerators and memory chips, may reach as much as $1.5 trillion by 2031.

Data centre sizes and costs are doubling roughly every 12 to 16 months, driven in part by surging prices for chips from the likes of Nvidia and SK Hynix, for networking equipment and for other components.

Developers already face shortages of transformers, water and power supplies. Fierce local opposition blocked or delayed $68 billion worth of projects in the US in the June quarter alone.

Investment running ahead of demand

Companies led by Microsoft, Alphabet's Google, Amazon.com, Meta Platforms and Oracle are investing trillions of dollars in data centres to meet AI's demand for computing resources.

Bain said that while the debate today is fixated on employee productivity, the economics of AI infrastructure will demand trillions in new revenue beyond productivity gains.

The report lands as debate intensifies over the still-elusive returns for AI service providers, with critics warning about an increasingly interconnected web of dependencies between technology manufacturers and AI developers.