The AI Capex Bubble and the Parallels to 5G

Every few weeks, the financial press publishes an apocalyptic column warning that hundreds of billions of dollars poured into artificial intelligence infrastructure will inevitably trigger a systemic economic crisis. The investment banks, for their part, are having a marvellous time underwriting $30 billion data centre debt packages and preparing prospectus filings for $1 trillion initial public offerings, pausing only occasionally to publish polite research notes wondering where the enterprise software revenue has gone. Reading these frantic debates over a civilisation-ending capital expenditure bubble, one feels an overwhelming urge to walk the commentators to an office window and point quietly at the nearest mobile phone mast.Between 2019 and 2024, the global telecommunications sector deployed roughly $1 trillion dollars rolling out fifth-generation mobile networks. The accompanying marketing campaign was an operatic triumph. Promoters promised remote surgeons performing delicate…