AI Industry Needs $6 Trillion Annual Revenue By 2031 To Justify Data Centre Boom: Bain Report

The global artificial intelligence industry will need to create nearly $6 trillion in annual revenue by 2031 to justify the scale of investment currently flowing into AI infrastructure, according to a report by Bain & Co cited by Bloomberg.

The consulting firm estimates that existing consumer and enterprise AI services could generate up to $1.8 trillion of this revenue.

The remaining $4.2 trillion would need to come from newer applications, including autonomous machines, robotics, drug discovery, mental healthcare and energy-related technologies.

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AI infrastructure investment races ahead of demand

“What the industry needs is a wave of innovation that will dwarf what mobile and cloud unlocked,” said David Crawford, the report’s lead author and chairman of Bain’s Global Technology, Media, and Telecommunications practice.

Crawford said AI infrastructure is currently being developed faster than demand growth and that sustaining investment would require adding around 1% to annual global GDP growth.

The report highlighted challenges facing the AI ecosystem as technology companies continue to invest heavily in computing infrastructure.

Microsoft, Google parent Alphabet, Amazon, Meta and Oracle are among companies committing significant capital towards data centres needed to support AI workloads.

Bain said data centre sizes and costs are increasing rapidly, with expenses rising due to higher prices of advanced chips from companies such as Nvidia and SK Hynix, along with networking equipment and other components.

Data centre expansion faces cost and resource hurdles

The consultancy expects global spending on data centres to reach $5 trillion to $6.5 trillion by 2030, adding at least 150 gigawatts of capacity. Annual spending on AI infrastructure, including data centres, computing systems and advanced chips, could rise to $1.5 trillion by 2031.

However, the expansion faces several challenges, including shortages of transformers, electricity and water resources.

Developers are also facing opposition from local communities, which has already delayed or blocked data centre projects worth $68 billion in the US during the June quarter.

Bain said the economics of AI infrastructure will require revenue growth beyond current expectations around workplace productivity. The industry will need major breakthroughs and new AI-driven business models to deliver the returns required to support the continuing investment cycle.