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Meta CEO Mark Zuckerberg has made the rash decision to double-down on massive AI spending, pushing a cutesy AI-mascot<\/a> and poaching tech industry veteran Chirantan Desai<\/a> to run a new division pushing Meta\u2019s AI onto corporate customers.<\/p>\n The company\u2019s investors, however, appear to be running out of slack for Zuckerberg\u2019s leash. Since Friday of last week, a large sell-off in Meta stocks shrunk his paper fortune by nearly $20 billion<\/a>, after Goldman Sachs began raising doubts about the long-term viability of the company\u2019s AI ambitions.<\/p>\n Zuckerberg\u2019s temporary losses notwithstanding \u2014 Meta\u2019s stock is still up more than 28 percent over the last month \u2014 it does raise the question as to how much capital will be made available to satisfy the tech industry\u2019s pie-in-the-sky AI push, and whether it can ever achieve revenue that would offset it.<\/p>\n In addition to Goldman Sachs\u2019 gloomy outlook for Meta, hyperscalers as a whole face what appears to be an insurmountable challenge in turning AI into a profitable venture. As Bloomberg reported<\/a>, the major management consulting firm Bain and Co recently penned an analysis<\/a> finding that the AI industry will need to reach an annual revenue of $6 trillion by 2031 if tech leaders continue along their current spend-happy trajectory.<\/p>\n Doing so will require leaps in technological progress the likes of which are unprecedented in the information age \u2014\u00a0well beyond past innovations embodied by world-changing consumer tech like smartphones, for instance.<\/p>\n If we take the cynical path and assume that the AI industry won\u2019t be able to pull off this miracle, then any major tech firm currently doubling down \u2014 like Zuckerberg\u2019s Meta \u2014\u00a0will have functionally spent the better part of the 2020s rigging up their own corporate noose.<\/p>\n As finance professor at the University of Pennsylvania\u2019s Wharton School Jessica Wachter penned in her own analysis<\/a> of the AI financial bubble, if the promised money shower \u201cfails to materialize,\u201d then future historians will look back on this moment as the \u201clargest misallocation of capital in history.\u201d<\/p>\n