AI Spending Boom Isn’t Boosting Profit Margins—at Least Not Yet
By Caroline Ashford ·
The sheer scale of it all—the promises of AI, the trillions in commitments, the relentless buzz around "circular financing"—is dizzying.
The Great Library is Being Digitally Incinerated
The sheer scale of it all—the promises of AI, the trillions in commitments, the relentless buzz around "circular financing"—is dizzying. We are told by strategists like Jan Frederik Slijkerman that the interconnected nature of this buildout mitigates systemic risk, and even Gary Tan assures us that these relationships "make strategic sense because they help participants expand their market reach." But I look at what is being built, and all I see is a system designed to ignore everything local. The foundational infrastructure required for this new digital world—the massive data centers, the chips, the cloud services—is creating an economic connectivity that has nothing in common with the lifeblood of a small town or even a well-loved library.
From Rare Books to $1.5 Trillion Commitments
The evidence is scattered across two wildly different landscapes: the polished financial reports and the dusty aisles of second-hand bookshops. CNBC reported on hyperscalers having combined lease commitments estimated at $1.5 trillion, a figure that Lotfi Karoui noted could be "the largest investment cycle since the 19th-century railway construction." This is not merely growth; it is an unprecedented mobilization of capital to build infrastructure. Meanwhile, the BBC tells a quieter story: independent booksellers are booming, but this boom has been fueled by institutional appetites that threaten physical culture. We learn about "Project Panama," where internal documents reveal Anthropic’s aim was to "destructively scan all the books in the world." The sheer scope of these data ingestion programs—the use of copyrighted works, as detailed in reports from the BBC—is a cultural plunder disguised as progress.
When Global Systems Consume Local Goods
This pattern is not new; it echoes the Age of Exploration. That era saw foundational infrastructure—maritime routes and colonial outposts—creating global systems that redefined economic connectivity by annexing entire continents and populations into a single, exploitable world-system. The mechanism is identical: massive capital expenditure on core infrastructure (be it ships or supercomputers) creates new centers of power far beyond the local sphere. What these titans are doing today—with Nvidia reportedly in talks to give financial guarantees of almost $250 billion to OpenAI, and Amazon/Alphabet investing billions into Anthropic—is not merely advancing technology; it is constructing a global digital empire that requires the systematic devaluing of physical goods and localized knowledge.
The institutions people actually live in—the family firm, the county library, the local bookstore—are simply unmapped assets in this grand ledger. The Age of Exploration taught us that when foundational infrastructure shifts, the cost of entry for everyone else is steep, usually measured in sovereignty or cultural autonomy. These tech monoliths are not building a shared future; they are establishing an oligarchy whose power will only be recognized by those who own the next set of railroads and steamships—or, rather, the chips and cloud capacity that mimic them.