Artificial intelligence economy and who really benefits from AI

BAKU, Azerbaijan, July 4. Artificial
intelligence has become the defining investment story of the global
economy. Technology companies are spending unprecedented sums on
chips, data centers and cloud infrastructure, governments are
rolling out national AI strategies, and investors continue to pour
money into companies linked to the sector. But while much of the
discussion focuses on AI's technological breakthroughs, another
question is becoming increasingly important: Who is actually
profiting from the AI boom? The answer is not as straightforward as
it may seem.

Although companies developing large language models remain the
public face of artificial intelligence, many analysts argue that
the biggest financial winners so far are the businesses supplying
the infrastructure behind AI, from semiconductor manufacturers and
cloud providers to data-center operators and electricity producers.
The scale of investment continues to grow.

According to an analysis by Bridgewater Associates, Alphabet,
Amazon, Meta and Microsoft are expected to invest about
$650 billion in AI-related infrastructure in 2026,
up sharply from around $410 billion a year
earlier. Bridgewater says demand for computing power continues to
outpace supply, forcing technology companies to accelerate
investment even further. For AI developers, this creates a
difficult balancing act.

Training increasingly sophisticated AI models requires enormous
computing resources, while serving millions of users every day
generates additional operating costs. Competition has also
intensified as companies race to release more capable models while
keeping subscription prices attractive. As a result, many AI
companies remain focused on expanding market share rather than
maximizing short-term profits.

If AI developers are spending hundreds of billions of dollars,
someone is earning that money. That has increasingly shifted
investors' attention toward what many describe as the "picks and
shovels" of the AI economy—the companies providing the hardware and
infrastructure that every AI model depends on.

Chipmakers such as NVIDIA and AMD have benefited from soaring
demand for AI processors, while Taiwan Semiconductor Manufacturing
Co. (TSMC) has become a critical manufacturer for many of the
industry's most advanced chips. Cloud providers including Amazon
Web Services, Microsoft Azure and Google Cloud have also emerged as
major beneficiaries as businesses increasingly rent computing power
instead of investing in their own infrastructure.

Unlike AI developers, whose commercial success depends on
attracting and retaining users, infrastructure providers generate
revenue regardless of which AI model eventually dominates the
market. Another sector experiencing rapid growth is data-center
construction. As AI models require far more computing power than
traditional software applications, technology companies have
accelerated investments in new facilities capable of supporting
advanced workloads.

Goldman Sachs estimates that between 2026 and
2031, roughly $7.6 trillion could be
invested globally in AI infrastructure, including computing
capacity, data centers and energy systems, reflecting what the bank
sees as a shift in AI investment toward the broader physical
economy.

For investors, data centers have increasingly become long-term
infrastructure assets rather than simply real estate projects.
Perhaps the least visible beneficiaries of AI are electricity
producers. Modern AI data centers consume enormous amounts of
power, forcing utilities to expand generating capacity and
modernize transmission networks.

The impact is already becoming visible in financial markets. In
the United States, mergers and acquisitions involving electricity
producers and energy infrastructure have accelerated as utilities
position themselves for rising demand from AI-related projects.
Industry analysts expect electricity consumption from AI data
centers to continue increasing over the coming decade. This has
renewed interest in nuclear power, natural gas, renewable energy
projects and battery storage, as technology companies seek reliable
long-term energy supplies.

One of the biggest questions surrounding AI is why company
valuations have risen much faster than measured productivity.
Economists note that this pattern is not unusual during periods of
technological transformation. Electricity, personal computers and
the internet all required years—sometimes decades—before their full
impact appeared in national productivity statistics. Businesses
first had to redesign operations, retrain employees and integrate
new technologies into existing processes.

Financial markets, however, price expectations rather than
current economic output. Investors are betting that AI will
eventually transform industries ranging from healthcare and
manufacturing to banking and logistics, even if those gains are not
yet fully reflected in official economic data. That debate has
intensified in recent months. In its latest annual report, the Bank
for International Settlements (BIS) warned that more than
$1 trillion in AI-related capital expenditure
planned for 2025-2026 could create financial
vulnerabilities if future returns fail to justify today's level of
investment. The BIS drew parallels with previous technology
investment booms, while stopping short of calling AI a speculative
bubble.

Not everyone agrees. JPMorgan argues that the current investment
cycle remains fundamentally stronger than previous technology
bubbles because the companies leading AI spending are already
profitable and continue generating substantial cash flows.
According to the bank, the challenge is less about whether AI will
create value than whether adoption can keep pace with the trillions
of dollars now flowing into infrastructure. The economics of
artificial intelligence increasingly suggest that today's AI boom
extends well beyond software. While AI developers remain at the
center of public attention, much of the industry's financial value
is currently flowing toward companies manufacturing chips,
operating cloud platforms, building data centers and supplying
electricity. That does not mean AI developers will not ultimately
become the biggest winners. But at this stage of the investment
cycle, infrastructure companies appear to be capturing a
significant share of the returns. Whether today's extraordinary
spending ultimately produces the productivity gains investors
expect remains one of the defining economic questions of the
decade. For now, the AI economy is proving to be as much about
power grids, semiconductor factories and data centers as it is
about algorithms.