Dan Ives said that massive AI-related capital expenditures by hyperscalers and chipmakers are funding a new tech economy rather than wasting resources.
This perspective challenges critics who view the current surge in artificial intelligence spending as a bubble. If these investments create a sustainable economic foundation, the current tech rally could represent a long-term shift in global computing rather than a temporary spike.
Speaking during a Bloomberg Surveillance interview on Bloomberg Television, Ives, the global head of tech research at Wedbush Securities, said the current investment phase is a catalyst for broader economic growth. He said that the spending is driving a rally in AI and data-center investments across the sector.
According to Ives, Microsoft and Meta are spending hundreds of billions of dollars [1] to build the artificial intelligence infrastructure powering the next generation of computing. He said these investments are not "spending to nowhere" but are instead the building blocks of a new industrial era.
Despite the scale of the current investment, Ives suggests the market is still in its early stages. He said that only 10% to 15% [2] of the artificial intelligence revolution's potential market penetration has been realized so far. This suggests significant room for growth as the technology integrates into more industries.
Ives also highlighted the role of specific companies in this expansion. He said that Anthropic's growth is just the tip of the spear for the AI rally, indicating that other firms will likely follow a similar trajectory as the infrastructure becomes available.
Throughout the interview, Ives said that the capital expenditures by hyperscalers are creating a productive cycle. By investing in the physical layer of AI, such as chips and data centers, these companies are enabling a wider ecosystem of software and services to emerge.
“Only 10-15% of the artificial intelligence revolution's potential market penetration has been realized so far.”
The argument presented by Wedbush Securities suggests that the high cost of AI deployment is a foundational investment. By framing the 'hundreds of billions' in spending as infrastructure rather than operational overhead, the analysis implies that the AI economy is mirroring previous technological shifts, such as the build-out of the internet's physical backbone, which eventually enabled a massive wave of secondary economic activity.
