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AI and gravity-defying US GDP
AI and gravity-defying US GDP

Reuters

time2 hours ago

  • Business
  • Reuters

AI and gravity-defying US GDP

LONDON, July 23 (Reuters) - For the second time in three years - and straddling two separate presidencies - heightened U.S. fears of recession have proved wide of the mark. The artificial intelligence boom is once again the prime suspect. The AI explosion and arms race since the launch of OpenAI's ChatGPT in November 2022 had its own mini crisis of confidence earlier this year with the emergence of China's cheaper DeepSeek rival. But neither those doubts nor the market angst about President Donald Trump's tariff war seems to have slowed the staggering capital spend and data center building supporting the AI push. As the brave new world of generative AI enters its third year, the financial impact has expanded well beyond the share price of chipmakers, as data center construction and capex spending more broadly are flattering U.S. GDP to a remarkable degree. Carlyle's Head Investment Strategist Jason Thomas has been arguing all year that this capex spending is an effective re-industrialization of corporate America, reshaping its focus away from software and intangible assets and toward investing in plants and machinery and energy like never before. The GDP impact from that is huge. Thomas reckons the AI-related capex boom – in data centers, graphics processing units, server infrastructure, power and related hardware and applications – already accounts for more than one-third of this year's second-quarter U.S. GDP growth. And he points out that order books in the relevant industries continue to grow at annual rates of more than 40%. With Q2 GDP data due out next week expected to show annualized growth of 2.5%, that's a sizeable AI tailwind. The scale of AI-related spending that has already occurred suggests that these are not just finger-in-the-wind estimates. Spending on physical data center infrastructure alone is up fourfold from 2020 levels, offsetting weakness in other construction categories. Among AI chip giant Nvidia's (NVDA.O), opens new tab top U.S. customers, Thomas writes, capex has grown 1.5 times as fast as revenue. Property, plant and equipment now account for 70% of typical book value for these firms, up from just 20% before the GenAI scramble began. The big question remains whether AI's contribution to economic growth is now peaking - even if that's difficult to deduce given the hype and optimism around the sector and evidence of robust chip demand growth worldwide. But Morgan Stanley this week analyzed this question by considering the borrowing needed to finance the ongoing AI infrastructure and data center buildout. Analysts Vishwanath Tirupattur and Vishwas Patkar forecast roughly $2.9 trillion of additional global data center spending through 2028, comprising $1.6 trillion on chips and servers and $1.3 trillion on real estate, building costs and maintenance. For context, that suggests an annual global outlay over the next three years that's close to the $950 billion spent by all S&P 500 firms combined last year. While some of this can be funded with cash, Morgan Stanley estimates that a $1.5 trillion financing gap remains, which will have to be raised via debt, likely a mix of loans, bonds, asset-backed securities and private funding. On top of this, they reckon that investment spending related to data center construction and power generation will add up to 0.4 percentage points to U.S. GDP through this year and next. Once again, AI is helping frustrate all other macro bets. And megacap quarterly earnings due over the coming weeks will again be examined forensically for signs of a sting in the tail. The opinions expressed here are those of the author, a columnist for Reuters. -- Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. Follow ROI on LinkedIn. Plus, sign up for my weekday newsletter Morning Bid U.S.

Adastra Acquired by Global Investment Firm Carlyle
Adastra Acquired by Global Investment Firm Carlyle

Business Wire

time18 hours ago

  • Business
  • Business Wire

Adastra Acquired by Global Investment Firm Carlyle

PRAGUE & TORONTO & LONDON & HONG KONG--(BUSINESS WIRE)--Adastra Group SE ('Adastra'), a leading global IT consultancy and services provider specializing in AI, data and cloud transformations today announced that Global investment firm Carlyle (NASDAQ: CG) has agreed to acquire a majority stake in the Group. Completion of the acquisition is subject to standard regulatory approvals in several jurisdictions. Founded in 2000 with headquarters in Prague, Czech Republic and Toronto, Canada, Adastra supports its customers throughout their AI, data, and cloud journey by defining data and AI-driven strategies and implementing transformative solutions to drive measurable business outcomes. It brings deep expertise in the financial services, automotive, manufacturing, TMT (technology, media and telecom), healthcare, retail and professional services sectors. The company has more than 2,000 employees across North America, Europe and Asia. In partnership with Adastra's founders, Carlyle will support the business in growing its leading data, cloud and AI offerings, supporting existing and new customers, as well as expanding its international presence via organic investments and targeted M&A. Equity for the investment will be provided jointly by Carlyle Europe Technology Partners V ("CETP"), a fund focused on investments in technology companies across Europe, and Carlyle Asia Partners Growth II ('CAPG'), a fund focused on investments in high-growth companies across a range of sectors in Asia. Carlyle will leverage its longstanding track record of investing in and scaling up leading IT services companies globally. Rob Turner, CEO at Adastra, and Pavel Kysela, COO at Adastra, said: 'This is an exciting and transformative step for Adastra. With Carlyle's deep experience and global network, we believe we can unlock a new phase of growth for the business and capitalize on the substantial opportunity in the global market for AI, data, and cloud services. We would like to thank the team for all the hard work that has made Adastra the business it is today, and we look forward to this partnership with the Carlyle team.' Vladimir Lasocki, Co-Head of the CETP investment advisory team, and Greg Zeluck, Co-Head of the CAPG investment advisory team, said: 'We are pleased to partner with Adastra's founders to back Rob, Pavel and their team, who together have built the company into a specialized, global data, cloud and AI services leader with a proven value proposition. In our view, there is a significant opportunity to expand Adastra's presence in the large, fast-growing and attractive global market for data, analytics, cloud, and AI transformations. With Carlyle's resources, global footprint, and deep experience in this space, we believe Adastra is well-positioned to further accelerate its growth trajectory through a combination of organic initiatives and M&A.' About Carlyle Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit, and Carlyle AlpInvest. With $453 billion of assets under management as of March 31, 2025, Carlyle's purpose is to invest wisely and create value on behalf of its investors, portfolio companies, and the communities in which we live and invest. Carlyle employs more than 2,300 people in 29 offices across four continents. Further information is available at Follow Carlyle on X @OneCarlyle and LinkedIn at The Carlyle Group. About Adastra Adastra is a global leader in AI and data-driven transformation, helping organizations lead with artificial intelligence—responsibly, strategically, and at scale. With over 25 years of experience, Adastra empowers enterprise clients to unlock business value through data innovation, operational excellence, and smart customer engagement. Trusted by some of the world's most prominent brands, Adastra delivers end-to-end solutions grounded in thoughtful strategy, robust governance, and deep technical expertise. From defining vision to ensuring execution, Adastra guides organizations through every stage of their AI, data and cloud journey—building future-ready capabilities and delivering measurable, lasting impact. Adastra serves clients across key industries including financial services, automotive, manufacturing, technology, media and telecom (TMT), healthcare, retail, and professional services. The company employs more than 2,000 professionals across several market facing and global delivery centres. J.P. Morgan served as financial advisor to Adastra on the transaction.

Adastra Acquired by Global Investment Firm Carlyle
Adastra Acquired by Global Investment Firm Carlyle

National Post

time18 hours ago

  • Business
  • National Post

Adastra Acquired by Global Investment Firm Carlyle

Article content PRAGUE & TORONTO & LONDON & HONG KONG — Adastra Group SE ('Adastra'), a leading global IT consultancy and services provider specializing in AI, data and cloud transformations today announced that Global investment firm Carlyle (NASDAQ: CG) has agreed to acquire a majority stake in the Group. Completion of the acquisition is subject to standard regulatory approvals in several jurisdictions. Article content Founded in 2000 with headquarters in Prague, Czech Republic and Toronto, Canada, Adastra supports its customers throughout their AI, data, and cloud journey by defining data and AI-driven strategies and implementing transformative solutions to drive measurable business outcomes. It brings deep expertise in the financial services, automotive, manufacturing, TMT (technology, media and telecom), healthcare, retail and professional services sectors. The company has more than 2,000 employees across North America, Europe and Asia. Article content Article content In partnership with Adastra's founders, Carlyle will support the business in growing its leading data, cloud and AI offerings, supporting existing and new customers, as well as expanding its international presence via organic investments and targeted M&A. Article content Equity for the investment will be provided jointly by Carlyle Europe Technology Partners V ('CETP'), a fund focused on investments in technology companies across Europe, and Carlyle Asia Partners Growth II ('CAPG'), a fund focused on investments in high-growth companies across a range of sectors in Asia. Carlyle will leverage its longstanding track record of investing in and scaling up leading IT services companies globally. Article content Rob Turner, CEO at Adastra, and Pavel Kysela, COO at Adastra, said: 'This is an exciting and transformative step for Adastra. With Carlyle's deep experience and global network, we believe we can unlock a new phase of growth for the business and capitalize on the substantial opportunity in the global market for AI, data, and cloud services. We would like to thank the team for all the hard work that has made Adastra the business it is today, and we look forward to this partnership with the Carlyle team.' Article content Vladimir Lasocki, Co-Head of the CETP investment advisory team, and Greg Zeluck, Co-Head of the CAPG investment advisory team, said: 'We are pleased to partner with Adastra's founders to back Rob, Pavel and their team, who together have built the company into a specialized, global data, cloud and AI services leader with a proven value proposition. In our view, there is a significant opportunity to expand Adastra's presence in the large, fast-growing and attractive global market for data, analytics, cloud, and AI transformations. With Carlyle's resources, global footprint, and deep experience in this space, we believe Adastra is well-positioned to further accelerate its growth trajectory through a combination of organic initiatives and M&A.' Article content About Carlyle Article content Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit, and Carlyle AlpInvest. With $453 billion of assets under management as of March 31, 2025, Carlyle's purpose is to invest wisely and create value on behalf of its investors, portfolio companies, and the communities in which we live and invest. Carlyle employs more than 2,300 people in 29 offices across four continents. Further information is available at Follow Carlyle on X @OneCarlyle and LinkedIn at The Carlyle Group. Article content About Adastra Article content Adastra is a global leader in AI and data-driven transformation, helping organizations lead with artificial intelligence—responsibly, strategically, and at scale. With over 25 years of experience, Adastra empowers enterprise clients to unlock business value through data innovation, operational excellence, and smart customer engagement. Article content Trusted by some of the world's most prominent brands, Adastra delivers end-to-end solutions grounded in thoughtful strategy, robust governance, and deep technical expertise. From defining vision to ensuring execution, Adastra guides organizations through every stage of their AI, data and cloud journey—building future-ready capabilities and delivering measurable, lasting impact. Article content Adastra serves clients across key industries including financial services, automotive, manufacturing, technology, media and telecom (TMT), healthcare, retail, and professional services. The company employs more than 2,000 professionals across several market facing and global delivery centres. Article content Article content Article content Article content Article content Contacts Article content Media Contact Article content Nicholas Brown (EMEA) Article content Article content Article content Article content +44 7471 037 002 Article content Lonna Leong (APAC) +852 9023 1157 Article content Article content Article content

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