Breaking down earning growth using Gemini and an example.
The Buyers (Hyperscalers like Microsoft, Google, Meta). What they do: They buy $10,000 stuff and accounting rules let them split that cost up across 5 years as a $2,000-a-year expense (Depreciation). They spend massive cash upfront, but their short-term profit reports still look clean and high.
The Sellers (Infrastructure like Nvidia) sell those $10,000 stuff. and get to record the full $10,000 sale as immediate profit today. The Result: Their earnings skyrocket instantly during the build phase.
What Happens When the Construction Boom Ends. When tech giants finish buying enough hardware, two things happen at once: Sellers lose their biggest customer boom: Once everyone has built their AI centers, chip sales slow down. The sellers' earnings growth drops off a cliff.
Buyers are stuck with the lingering bill: Even if tech giants stop buying new hardware, they still have to keep paying off that $2,000-a-year depreciation fee for the next 4–5 years on everything they already bought.
Final Test: AI software must start making real money. The productivity and revenue created by AI tools must be big enough to outweigh the drop in chip sales and cover the leftover hardware bills. If AI software doesn't deliver that massive revenue surge, the growth story breaks.