The Money Behind The AI Boom Is Getting More Expensive

The pricey debt behind the AI boom, infrastructure projects in space and more in this week’s Prototype. To get it in your inbox, sign up here.

My colleague Giacomo Tognini has an absolutely must-read article about the expensive infrastructure boom sparked by the growth of AI, where he highlights the fact that “estimates of the total cost of the buildout range from $2.8 trillion by 2030 to $10.3 trillion by 2032 in the U.S. alone.”

That’s a staggering figure, potentially representing a greater percentage of America’s GDP than the railroad boom of the 1880s and 1890s, which minted a great number of fortunes. A lot of that, as Tognini points out, is being financed by debt–at least $1.3 trillion so far. That debt is starting to run into the greater macroeconomic uncertainties of our time: higher interest rates on treasury yields are pushing up interest rates on bonds for data centers, with some reaching rates as high as 9.75%.

Paying for that debt puts more pressure on AI companies to actually deliver on promises of revenue. But some of that promise fell to Earth a little bit this week, when a leak of Anthropic’s prospectus seemed to indicate the company only took in $4.6 billion in revenue last year, with operating losses alone of more than $8 billion–a figure that does not account for the company’s hundreds of billions worth of present and future capital expenditures.

That said, Anthropic did claim to have hit $65 billion in annualized revenue this past July, but that’s not the same as it making $65 billion this year. That figure will likely be much lower. SpaceX, for example, is expected by analysts to reach about $14-16 billion in AI segment revenue this year–though a chunk of that comes from a deal it struck to provide compute power for Anthropic. Those figures are certainly nothing to sneeze at, but they’ll need a lot more before seeing any return on their unprecedented investment.