How Large is the AI Circle?
Every major technology build-out requires two phases, according to Carlota Perez1: the infrastructure to power it, & then the applications to pay for it.
Between 1996 & 2005, American telecom companies spent $1.5t building the internet in today’s dollars.2 Meanwhile, applications riding on that infrastructure booked $180 billion of revenue.3
That’s an interesting ratio, isn’t it? Application revenue to infrastructure spend. It matters because the shorter the gap between the two, the sooner the infrastructure pays for itself. Let’s compare this to the AI era.