One problem in the artificial intelligence industry that just doesn't seem to be going away: Companies still aren't saying new AI tools are making them more profitable.
"While it's easy to find anecdotal examples of AI-driven margin gains or cost-cuts, economically meaningful implementation seems uneven at best," Barclays strategist Venu Krishna wrote in a note on Thursday.
"While nearly half of all companies talked about AI [on recent earnings calls], only 12% were willing to quantify AI-related value capture," Krishna added. "Of those, tech, financials, and healthcare companies were over-indexed at 68% of the total. The average reported gain in operational efficiencies seems impressive at first blush at 56%, but these assessments have not meaningfully changed over the last three years of LLM advances, calling their precision into question."
Krishna noted that Meta's (META) AI tools delivered an 8.3% increase in Facebook ad clicks and a 15.7% uplift in conversions.
Online pet care retailer Chewy (CHWY) is targeting $50 million in cost savings in fiscal year 2027 through AI deployed across fulfillment and customer service.
And Hilton (HLT) is looking to reduce program costs, integrating AI to drive 75-100 basis points of margin expansion for hotel owners over time.
Other than these call-outs, AI productivity winners are scarce, Krishna said.
"Taking a step back, the proportion of S&P 500 firms willing to quantify AI-related productivity gains remains well below the percentage that simply cites AI as present within the business, illustrating the chasm that remains between the desire to appear as 'AI-enabled' and the ability to actually deploy and execute," Krishna noted.
At some point soon, the average company will have to start making money from the tech to justify the spending, particularly as hyperscalers such as Meta, Microsoft (MSFT), and Amazon (AMZN) invest billions to build out AI infrastructure.
As it stands, Big Tech spending is poised to hit another gear and really weigh on precious cash flow.
Global investment in AI infrastructure will hit a record $31.6 trillion through to 2050, according to baseline projections in PwC's new Global Data Centre Outlook report published this week.
On an annual basis, data center capital expenditure is forecast to rise from roughly $800 billion per year in 2026 to $1.8 trillion per year in 2050.
PwC said AI infrastructure investment is expected to accelerate as chips and other internet-connected equipment require upgrades every few years.
"AI infrastructure is becoming one of the defining capital allocation challenges of the next generation," PwC global infrastructure leader of Australia Clara Cutajar said. "It cuts across technology, energy, real estate, supply chains, regulation and financing. This changes how infrastructure investors need to think about capital requirements, risk and returns."
Brian Sozzi is Yahoo Finance's Executive Editor, host of the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].
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