Revenue tied to artificial intelligence will need to swell to hundreds of billions of dollars by the end of 2027 to avoid a potential reckoning for the industry's massive infrastructure buildout, according to analysts.

Annualized revenue across AI developers, including OpenAI and Anthropic, will need to reach $400 billion to $600 billion by the end of 2027 and approach $1 trillion by 2028 or 2029, 22V Research analysts wrote Friday.

Reaching those targets would make AI-related infrastructure spending plans "likely to come to fruition," analysts said. Missing the mark could trigger a capital-spending "cliff," or a sharp pullback in planned investments beginning in 2029.

The stakes are high. AI-related capital spending is expected top $1.4 trillion in 2027 and exceed $1.5 trillion in 2028, according to the analysts. They argued that AI developers will need to generate enough revenue to justify those investments and sustain spending in subsequent years.

Concerns about AI revenue are already weighing on stocks. Valuations for companies tied to the infrastructure buildout have declined even as earnings expectations have increased, according to the analysts. Investors may be growing skeptical that the current pace of spending can continue through the end of the decade.

The broader pessimism contrasts with investors' expectations for AI demand. Roughly 54% of traders surveyed by 22V Research indicated they don't expect an oversupply of computing capacity until after 2030, while the analysts argued that stock valuations reflect concerns about excess capacity as early as 2029.

But 22V Research still expects AI-related capital spending projections to hold through 2027, suggesting the industry's buildout has room to grow even as questions mount about its long-term sustainability.

Fears about AI revenue growth were stoked on Thursday after the Financial Times reported that OpenAI's annualized revenue was tracking $20 billion below a previously indicated target.

The shortfall may have been overstated, as Bloomberg reported that OpenAI's annualized revenue hit $50 billion at the end of September and is still expected to reach or exceed $70 billion by the end of the year.

Chinese developers pose another risk. About 54% of investors surveyed by 22V Research said competition from lower-priced Chinese models affected their outlook for U.S. infrastructure spending. Lower prices for AI services could offset swelling demand, making it harder for developers to generate sufficient revenue to support future investments, analysts said.