On Thursday, market commentator The Kobeissi Letter warned that the global artificial intelligence boom has broken Moore's Law, with compute demand growing at twice the historical rate.
AI Demand Growing Twice As Fast As Moore's Law
In a series of posts on X, formerly Twitter, the capital markets analyst said, "AI compute demand is now growing at over 2 TIMES the rate of Moore's Law, creating a massive shortage."
"Just to meet current demand, $500 billion must be invested in data centers per year until 2030."
The analysis noted that compute -- the processing power that fuels AI systems -- has become the world's "most valuable commodity."
"By 2028, global data center spend will hit $900 billion," the thread continued, describing the pace as unprecedented growth for the industry.
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Data Centers Are The New Oil
According to The Kobeissi Letter, data centers are facing an $800 billion revenue shortfall as AI infrastructure struggles to keep pace with explosive demand.
"There are now $40 billion worth of U.S. data centers under construction, up +400% since 2022," it said. "For the first time, the value of U.S. data centers under construction will soon exceed office buildings. This is a historic shift."
The post also warned that AI-driven power demand will quadruple over the next decade, with data centers projected to consume 1,600 terawatt-hours of electricity by 2035, or roughly 4.4% of global supply.
AI Boom Drives 40% of S&P 500 CapEx, Early Adopters Poised To Profit
The commentator characterized the AI boom as a "generational opportunity" marked by record levels of investment, noting that AI-related projects now make up nearly 40% of capital expenditures across the S&P 500.
The firm added that companies quickest to adapt stand to gain the most from what it described as a modern-day gold rush.
What Is The Broader AI Market Debate
The commentary arrives amid intensifying debate over whether the AI boom resembles the dot-com bubble of the early 2000s.
Global investment firm GQG Partners last month warned that the tech sector is showing "dotcom-era overvaluation," citing soaring capital spending and stretched valuations.
Previously, OpenAI CEO Sam Altman, Amazon.com, Inc. (NASDAQ:AMZN) founder Jeff Bezos and Meta Platforms, Inc. (NASDAQ:META) CEO Mark Zuckerberg, all indicated that the market may be overheating.
However, Goldman Sachs pushed back, arguing that this cycle is different -- driven not by speculation but by fundamental growth in AI adoption and corporate investment.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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