Superstar economics rule the AI economy.
While NBA legend Steph Curry inked a four-year, $215 million contract extension, Mark Zuckerberg just offered 24-year-old Matt Deitke $250 million over four years to work at Meta’s superintelligence lab.
Though Zuckerberg would agree the cost for AI talent is jaw-dropping, it pales compared to Meta’s 2025 capital expenditures (CAPEX), now estimated between $66 billion and $72 billion.
Market researcher Dell’Oro Group reported global data centre CAPEX surged 51 per cent to $455 billion in 2024, driven by AI-optimized servers deployed by hyperscalers. McKinsey projects that $6.7 trillion worldwide will be invested in data centre capacity between 2025 and 2030.
Tech giants view this as an existential race where the winner gains an insurmountable advantage.
Is this CAPEX trend lunacy? No, since we just got the answer to the most important question in the stock market: Where is the AI revenue — outside of Nvidia and semiconductors?
Answer: see Microsoft and OpenAI.
Both companies recently released revenue numbers that are blowing the lid off the misguided argument that we are still pre-revenue when it comes to AI. We know we have the investment, and now we are seeing the returns.
Microsoft and OpenAI are proving that AI revenues are exceptional, and the growth is parabolic.
Satya Nadella, Microsoft’s CEO, shows that even large ships can change course quickly. Although Microsoft missed the mobile platform shift, it arrived at the AI party long before its competitors and made the most important partnership with the most important company of this era, OpenAI.
Microsoft invested $13 billion for revenue and profit shares, plus OpenAI as an Azure customer. Microsoft recoups its investment as OpenAI spends heavily on Azure. Last quarter, Azure revenue grew 39 per cent.
With annual projected revenue of $86 billion, Azure’s growth is astounding. OpenAI’s revenue rocketed from near-zero pre-ChatGPT to $12 billion annually by mid-2025.
And forecasts through the end of the decade are mind-blowing.
Business website, The Information, reported that Open AI’s revenue forecast for 2029 is $125 billion.
This is exponential growth. We have had a flurry of announcements over the last several months that are raising both excitement and eyebrows.
Just this year, OpenAI alone has made around $1 trillion-worth of AI deals. That is a trillion with a T. Their expansion strategy focuses on new partnerships with Nvidia, AMD, Broadcom, and Oracle.
While these partnerships vary in funding sources, size, and contract length, one thing is clear. The entire tech industry is mobilizing around the largest industrialization movement in human history.
This is not dot-com speculation. We are witnessing the largest profitable infrastructure build out in modern history that will reshape global economies or generations.
We are already seeing cuts at Amazon and Microsoft as each company cites hundreds of millions in savings on head count in the middle and bottom layers.
Employment growth at the Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) is at 15-year lows, plunging from 45 per cent in 2020 to two per cent in 2025.
The productivity gains are real. Microsoft’s net income per employee is up 36 per cent since 2023. This is not about cutting costs — it signals AI’s amplification of human capabilities.
How, then, can Canada win?
We benefit from structural advantages that hyperscale competitors cannot replicate.
Our electricity grid is 82 per cent clean, with hydropower dominating Quebec. Canada offers natural cooling and the world’s cleanest computing infrastructure.
Multinationals will pay premiums for low-carbon infrastructure.
The talent equation strengthens our position.
The University of Toronto ecosystem alone has produced breakthrough AI research that commands global attention.
PitchBook’s 2025 data reveals Canadian university founders are climbing fast in global venture capitalrankings: U of T rose six spots to 17th, University of Waterloo jumped three places to 18th, while York University and University of Calgary tied at 100th, rising by five and 38 spots respectively.
Strategic government policy will determine whether Canada captures this value. The model exists: Bell and Telus recognized that building overlapping 5G networks made no economic sense, so they shared infrastructure to save capital expenditures.
Ottawa could apply this principle to hyperscaler data centres focused on AI, simultaneously addressing sovereign AI concerns while reducing redundant spending.
Accelerated depreciation helps. But the biggest opportunity lies in incentivizing corporate venture capital investment. Making corporate venture capital eligible for the scientific research and experimental development (SR&ED) program would unlock billions in private capital for Canadian AI startups.
AI infrastructure spending rivals historic build-outs like railroads and electrification. What distinguishes this cycle is not just its scale but its velocity — capital deployment is happening in years, not decades — and its concentration among tech giants.
What percentage of GDP should Canada invest in AI infrastructure?
Railroad build-outs in the 1800s consumed three to five per cent of GDP, transforming entire economies and creating the infrastructure for modern commerce. By comparison, the Manhattan Project — which fundamentally reshaped geopolitical power — consumed roughly 0.1 per cent of U.S. GDP.
At three per cent of GDP, the U.S. would invest $840 billion annually in AI infrastructure. Canada, at the same rate, would invest $69 billion.
At five per cent, those figures rise to $1.4 trillion for the U.S. and $115 billion for Canada. These benchmarks provide guideposts for the scale of commitment required to lead rather than follow in this transformation.
Prime Minister Mark Carney likes to say “Elbows Up.” Yet, when it comes to the AI revolution, we have not even elbowed our way through the crowd at Union Station to line up at Gate One for a Leafs game.
Artificial intelligence has exploded, with the U.S. allocating the capital needed to fuel it.
Canada can either position itself as the preferred destination for this investment or remain a spectator to the largest wealth creation opportunity in modern history.
