AI Demand Begins to Justify Massive Cost of Data-Center Buildout

AI Demand Begins to Justify Massive Cost of Data-Center Buildout Revenue from artificial intelligence has reached a tipping point, showing that the hundreds of billions of dollars tech companies are spending on it may be economically sustainable, according to a report from research firm Exponential View. Global AI sales, excluding China, reached $25 billion in the first quarter of 2026, exceeding the industry’s estimated $21 billion in depreciation costs tied to investments in data centers and chips for the second consecutive quarter. While the milestone suggests that AI companies are beginning to cover the cost of their capital spending, the margins are thin. Depreciation charges still consume more than two thirds of revenue, leaving a small buffer to cover other costs such as power, labor and financing.