Munster Says AI Budgets Have Room to Grow as Noble Questions Returns

Gene Munster argued that corporate AI budgets have substantial room to grow, while investor George Noble warned that the spending may not produce returns needed to support AI valuations. Their disagreement puts the potential for larger budgets alongside questions about the cost and payoff of the buildout.

Munster, co-founder and managing partner of Deepwater Asset Management, put average AI spending at $25 per employee per month, compared with $700 for software. He said the gap leaves companies room to increase AI budgets, especially in businesses reliant on knowledge work. Munster said the AI trade could prove more resilient than expected over the next three to five years.

Noble challenged that outlook, pointing to large capital outlays, rising debt and uncertain returns. He argued that AI valuations rely heavily on earnings projected years into the future. More expensive capital, he said, could make credit markets less willing to finance those plans.

Munster previously argued that investors may be underestimating how early the AI shift remains, amid questions about the AI buildout and potential returns.