Only 0-2% of S&P 500 earnings growth comes from AI productivity
Chamath Palihapitiya argues that the recent earnings growth of the S&P 500 can be attributed to factors other than AI productivity, with only 0-2% stemming from it.
The majority of the growth is driven by inflation and buybacks. A recent survey found that 56% of CEOs saw no AI revenue or cost benefit, while only 12% gained both outcomes simultaneously.
AI adopters are now under pressure to prove that the technology generates returns above the risk-free rate or justify why cash wasn’t left on the balance sheet.
The AI boom has led to significant investments in data centers and AI chips, with companies like Nvidia struggling to meet demand.