BCA Research Warns AI Industry Needs $10 Trillion Revenue

BCA Research warns that the global artificial intelligence industry must generate approximately $10 trillion in annual revenue to justify the massive capital expenditure currently flowing into data centers. The research firm argues that current corporate profit margins are artificially inflated because tech hyperscalers treat hardware purchases as capital spending to be depreciated over time rather than immediate operating expenses.

Chief Economist Peter Berezin reports that annual depreciation charges for major hyperscalers are projected to more than double, rising from $255 billion in 2026 to $581 billion by 2029. This increase comes as total capital expenditure is expected to reach $1.16 trillion.

To profitably monetize a steady-state annual expenditure of $1.4 trillion, the report suggests hyperscalers alone would need $7.4 trillion in annual revenue. This calculation assumes a 30% EBITDA margin and a 15% pre-tax return on invested capital.