The strongest evidence would be sustained growth in AI-related revenue and free cash flow that outpaces the growth in AI capex.
Revenue growth alone is not enough. Companies can generate more AI sales while spending even faster on GPUs, data centres and power. I would look for rising utilisation of AI infrastructure, improving operating margins and, ultimately, higher free cash flow and ROIC.
If hyperscalers can show that each additional dollar of AI investment is producing growing incremental cash returns, the spending cycle becomes much easier to justify.
For me, improving ROIC alongside accelerating free cash flow would be the clearest sign that AI capex is creating economic value rather than simply fuelling an expensive infrastructure race.
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