The Verge has delivered some of the year’s best interviews with a variety of tech CEOs, and this end‑of‑year conversation between IBM CEO Arvind Krishna and Nilay Patel may actually be my favorite. This quote on AGI in particular has me reflecting even more deeply on the scale of private AI investment:
So, let’s ground this in today’s costs because anything in the future is speculative. It takes about $80 billion to fill up a one-gigawatt data center. That’s today’s number. If one company is going to commit 20-30 gigawatts, that’s $1.5 trillion of CapEx. To the point we just made, you’ve got to use it all in five years because at that point, you’ve got to throw it away and refill it. Then, if I look at the total commits in the world in this space, in chasing AGI, it seems to be like 100 gigawatts with these announcements. That’s $8 trillion of CapEx. It’s my view that there’s no way you’re going to get a return on that because $8 trillion of CapEx means you need roughly $800 billion of profit just to pay for the interest. Arvind Krishna
This is a back of the napkin calculation but it assumes that this kind of large‑scale capital expenditure will be financed with debt. So a common rule of thumb is that you need ~10% annual profit relative to capital expenditure just to cover interest payments and keep the investment viable.
In my opinion that number makes the scale of the AGI challenge effectively insurmountable. For reference, in 2024, the combined profits of Microsoft, Alphabet, Amazon, Meta, NVIDIA, and Apple amounted to about $394 billion. That is still well below the $800 billion in annual profit required simply to service interest on the $8 trillion debt. The sustainability threshold implied here just seems overwhelming.
I read the interview but you can listen and watch the whole thing here.
