AI to Transform Global Economy with Growth and Innovation, Says UBS: Report

AI Set to Transform Global Economy with Growth and Innovation, Says UBS: Report
Artificial Intelligence (AI) is poised to drive significant growth, creating an ecosystem for companies and investors that is brimming with innovation and financial gains, according to an ET report that quoted a UBS report. This technological shift is expected to open doors for companies and investors, positioning AI at the forefront of global progress.

  • Make Telecom Talk My Trusted Source
  • Source of Google
  • Source of Google

Also Read: AI Can Be a Game-Changer for Europe’s Economic Growth: Report

Projected Revenues

By 2027, the AI sector is projected to generate massive revenues, with AI data centers expected to contribute USD 331 billion, while cloud AI services will generate USD 185 billion. Large language models (LLMs) are anticipated to bring in USD 255 billion, and applications, the most lucrative layer, are set to drive USD 395 billion in revenue, the report stated.

“For investors, the key focus will be on the ratio of monetisation potential between the AI application layer and the costs of the enabling and intelligence layers, a crucial metric for determining returns,” the report said.

A significant rise in capital expenditures (capex) for AI-specific infrastructure is expected, with AI data centers anticipated to account for 75 percent of total data center capex by 2027, up from 30 percent in 2023.

Also Read: AI Is a Force for Good, Says New Google India MD: Report

GPUs and hyperscalers

GPUs, which comprise over 70 percent of AI server costs, are positioned to capture the largest share of AI’s value creation. Other components, such as memory and interconnect technologies, will also play vital roles, making up 15 percent and 9 percent of server costs, respectively.