Peter Smith
Wall Street is placing bigger bets on AI than ever before. Citigroup just released an updated forecast that's catching serious attention—the bank now expects AI service revenues to hit nearly $1 trillion by 2030. That's not a typo.
The Numbers Behind the Boom
According to Jukan, who tracks institutional AI updates, Citi's "AI Industry Model" shows revenues jumping from $43 billion next year to $975 billion by decade's end. If that plays out, we're looking at one of the fastest-growing markets in modern history.
Citi's forecast paints a picture of an industry moving from lab experiments to real-world dominance. Here's what the bank is projecting:
- AI service revenues: $43B in 2025 → $975B by 2030 (86% CAGR)
- U.S. hyperscaler CAPEX: $4.4 trillion over five years
- Global CAPEX: $7.75 trillion to build data centers, AI chips, and cloud infrastructure
The bank says companies aren't just testing AI tools anymore—they're baking them into their core operations. Meanwhile, demand is so hot that cloud giants like AWS and Azure are struggling to keep up. AWS alone has a $200 billion backlog, mostly for AI workloads. Citi expects the supply crunch to ease by late 2025, which should unlock even faster growth in 2026.
Why This Matters
Citi believes the market is still underestimating AI's economic punch. The technology is reshaping corporate productivity through automation, changing consumer behavior with personalized AI assistants, and triggering a massive infrastructure buildout that rivals the early internet boom. If the forecast holds, we're looking at a trillion-dollar economy that will reshape cloud business models and redefine competition among tech giants like Microsoft, Google, Amazon, and NVIDIA.
Of course, there are risks. The scale of investment could strain capital markets, and regulatory uncertainty around AI could slow things down. But for now, the message from Citi is clear: AI isn't just the next big thing—it's the next supercycle.
Peter Smith
