Episode Details

It is undeniable that AI has taken over business and investing conversations since ChatGPT's debut on November 30, 2022. In addition to pushing up the market capitalizations of the companies that supply its infrastructure (chips, power, electrical equipment), it has also given rise to the largest investment build-up in history, with $2 trillion spent so far on AI architecture, with more to follow. The debate about AI though has been stunted by people talking past each other, with advocates pointing to its potential market being "huge" and skeptics noting that the "massive" cap ex makes value creation impossible. I much confess that I find myself pulled in a dozen different directions, as the debate unfolds on multiple dimensions (open vs closed models, AI as tool or employee replacement, AI as good or bad for society). This session was really meant for an audience of one (me), and during the session, I try to develop a framework for making sense of AI as a business. In the process, I develop tools that I can use to judge whether Anthropic is worth $2 trillion and whether the hyperscalers can get sufficient payoff from their trillion in AI cap ex. I hope that you find my framework and tools useful.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/AIBusiness.pdf
Blog Post: https://aswathdamodaran.blogspot.com/2026/08/ais-bar-mitzvah-moment-from-hype-hope.html
Spreadsheet: https://pages.stern.nyu.edu/~adamodar/pc/blog/BreakevenEnterprisevalue.xlsx

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