Does the real economy care that much about AI?
Take your pick of alarmist projections about the future of the global economy from top tech leaders. Monzo’s founder, Tom Blomfield, reckons unemployment will surge over the next five years as more and more human output is replaced by AI. Elon Musk reckons it will be near 100 per cent in a decade.
But projections are one thing. What is actually happening on the ground right now?
I’ve been sent some fascinating data on AI spend by Capital on Tap, one of the UK’s biggest SME lenders. The firm tracks spending patterns among tens of billions of pounds worth of transactions each year.
AI adoption has increased massively among small businesses over the past couple of years, the data found. Just 3.2 per cent of SMEs spent money on the services of AI companies in the second quarter of 2024. That has since quadrupled to 12.8 per cent in the second quarter of 2026.
Unsurprisingly, the mean average spend on AI has also rocketed, going up from £93 per small business to £288 over the same period.
But here’s the thing. The median average spend for the second quarter of this year is in fact much lower, at £75.60, because the mean is skewed by a handful of big spenders (£3,159 each for the AI evangelists in the 99th percentile of AI spending).
And on average, AI tools still account for only 0.1 per cent of the value of all the card spending that Capital on Tap processes. Read that again: only 0.1 per cent.
Extrapolate that out to the wider economy and that puts total spending on AI services at just £4bn per year in the UK – less than a tenth of the turnover of Tesco.
This broadly tallies with other estimates of annual global AI spending that put it somewhere in the range of £100bn to £150bn.
Doubtless that level of spend will keep going up as the biggest AI providers start charging more for their models. But it comes at a time when the world’s biggest AI firms are expected to blow almost $1 trillion on infrastructure this year, and even more than that next year, a lot of which is funded by debt.
Businesses’ AI spend would have to grow by orders of magnitude to make those AI infrastructure bets pay off. It is growing – and fast – but not that fast.
So how do you make the sums add up? That’s a question I am not equipped to answer, but it’s one more and more investors are pondering.