Is the Global AI Capex Cycle Sustainable?
AI Investment Efficiency and Sustainability
After setting record highs, global equity markets have entered a volatile phase as investors debate whether the massive capital flows into artificial intelligence (AI) infrastructure will sustain earnings growth or erode profitability. The world’s largest technology firms—collectively the Magnificent 7—are at the core of this debate. Their escalating capital expenditures have created what some analysts describe as an “AI perpetual motion machine,” revolving around OpenAI and its expanding ecosystem
Tracking Capital Productivity in the AI Era – the Framework
To assess whether these enormous outlays are truly productive, we introduce the Computing Power Investment Efficiency (CPIE) indicator—a semi-annual measure tracking how effectively the Magnificent 7 convert capital expenditure (Capex) into usable computing power. The CPIE expresses the ratio between incremental computing capacity (in operations per second) and the total Capex over a given period. A higher ratio signals superior efficiency—more computational output per dollar spent—while a lower ratio indicates diminishing returns.
