Is The Tech Market Going Nuts?

Today we learned that OpenAI just signed a five-year deal with Oracle to spend $300 Billion on data centers (this is five-times Oracle’s annual revenues today), more or less doubling Oracle’s annualized revenue in one transaction. Oracle’s stock went up about 35% or more.

This $300 billion deal can now be added to more than $450 billion cited by Meta, Amazon, Microsoft, and Google to total almost $750 billion allocated this year toward AI infrastructure alone. If you add the cost of engineering talent and energy to be built, it’s probably more like $800 billion. (Meta’s new Louisiana data center is the size of Manhattan.)

If you consider that US GDP is around $30.3 trillion (expected to grow at 1.7% per year), this means that almost 2.5-3% of our entire US GDP has been allocated to AI infrastructure this year.

I’m not sure if we’ve ever committed so much capital to one activity in one year since the Apollo Space Program in 1964. Even the Manhattan Project, which developed the Atomic Bomb to end World War 2, was only about .4% of GDP.

I’m not saying this is too much money, since these are private companies committing funds from their shareholders. But the bet these companies are taking is that somehow, over the coming decades, some multiple of 2.5% of GDP is going to come back as revenue to providers around the business of AI.

This next week is the big HR Technology Conference in Vegas, and I”m going to be keynoting on Thursday to give you an overview of the space. It’s quite astounding how quickly we went from “What is AI?” to “Let’s implement AI as fast as we can” in virtually every company I talk with.

Just a few of the things going on to talk about next week.

• Workday announced the acquisition of Paradox, cementing their move into high-volume recruiting. This complements the company’s acquisition of Hiredscore, and further increases Workday’s AI bench of talent. At the same time the class-action lawsuit (Mobley vs. Workday) is moving ahead, threatening the company with some kind of major settlement for AI-induced age discrimination in hiring.
• ServiceNow, the most “AI centric” of the big vendors, announced its Zurich release, which includes new dev tools for IT departments (and users), more features for data management and security, and Agentic Playbooks to help companies understand how to build human to AI workflows.
• WorkHuman, the billion dollar employee recognition company, introduced its Human Intelligence system, which gives companies highly reliable skills and capability inferences across the workforce, based on peer to peer recognition and feedback,
• Eightfold introduced its end-to-end toolset for high-volume recruiting, including an AI-interviewer (infinite scale for high volume job openings), Candidate Concierge (candidate chat), and new workflows for its talent intelligence and applicant tracking system,
• SAP SuccessFactors announced the acquisition of SmartRecruiters, and you can expect to see more about SAP and our Galileo at SAP Connect in October,
• UKG has announced and is now delivering a wide array of AI agents for its massive customer base of front-line worker companies. These agents help with shift scheduling, real-time pay, payroll reconciliation, shift sharing, and all sorts of important but complex scheduling issues faced by the 70% of workers who work in retail, hospitality, healthcare, transportation, entertainment, and other front-line positions.
• OpenAI announced its Jobs platform and strategy to develop and certify AI skills.
• Many dozens of new companies have been announcing new agentic features including Microsoft, Arist, Cornerstone, ADP, Lightcast, Draup, SHL, Techwolf, Visier, Beamery, Gloat, Reejig, Deel, HiBob, and many others.
• We will be announcing a major new set of features in Galileo, and also highlighting that we have more than 600 companies now using our intelligent Agent for HR.

Where is all this going?

As you’ll hear about next week, Agentic AI in HR is here now, and this means our HR organizations are going to get smarter, more integrated, and probably smaller. The tradition ratio of 100:1 employee to HR ratio could go up to 150-200 over the next few years, and that means HR professionals will become Superworkers, with even more opportunity to add value.

The big HCM vendors (SAP, Workday, Oracle, ADP, Dayforce, UKG) are all heavily investing in AI now, and they’ve hired and developed strong AI teams internally. Each is focused in different areas, so most of you will start to see many AI options from your core providers. In the complex areas like talent acquisition, L&D, and employee experience.

Several things I hope to share next week. First, I’ll try to give you an overall sense of how to manage this proliferation of new tools, and share what we’ve learned about AI transformation process and governance. Second, I’ll share what we’ve been learning about in job redesign and task analysis, an important enterprise discipline in large AI transformations. And third, I’ll be showing you more about the culture and leadership changes we can expect that will help our companies transform more effectively.

I’d say there’s a lot of fast-moving activity taking place (witness Salesforce’s layoff of 4,000 people last week), but for many of you this is a new career in rethinking jobs, organization structure, and skills development as we all move to become what we call Superworker companies.

There will be many announcements and I’ll cover as many as I can, but just strap yourself in. When the technology industry invests almost 3% of US GDP in AI, we are all going to be flooded with tools, systems, and new toys to play with.

(And join our AI Excellence Study to learn what world-class companies are doing!)

Additional Information

Galileo Learn™ – Get Ahead. Stay Ahead. A Revolutionary Approach To Corporate Learning

Can AI Beat Human Intuition For Complex Decision-Making? I Think Not.

The Road To AI-Driven Productivity: Four Stages of Transformation

Learn from AI Transformation Leaders: Join our AI Excellence Study!