Krishan Rattan.
The rapid decline in artificial intelligence deployment costs could open new avenues for industrial development, infrastructure investment and capital market participation, according to Krishan Rattan, Founding Partner of global investment firm Terra Invest.
Rattan believes that as AI becomes more affordable, its economic impact will extend beyond improving business productivity. Lower operating costs could enable companies to undertake research, engineering and manufacturing activities that were previously too expensive or commercially unviable.
The shift could influence how industries evolve and where investment capital is directed.
According to Stanford University's 2025 AI Index, the cost of operating AI systems at approximately GPT 3.5 level capability declined more than 280 fold between November 2022 and October 2024. The reduction illustrates how rapidly advanced computational capabilities are becoming more accessible.
Rattan observes that affordable AI could allow engineering teams to evaluate thousands of design possibilities instead of a limited number, while research organisations could explore scientific hypotheses that previously required substantial financial resources.
Such developments may encourage the emergence of companies combining software, biotechnology, automated laboratories and manufacturing within a single business model.
For investors, these businesses could present opportunities that extend beyond conventional technology sector classifications.
Growing AI Adoption Could Accelerate Energy Demand
The expansion of AI is also expected to increase demand for electricity and computing infrastructure.
The International Energy Agency's 2025 Energy and AI report estimates that global data centre electricity consumption could rise from approximately 415 terawatt hours in 2024 to around 945 terawatt hours by 2030 under its base case scenario.
Rattan believes that access to reliable electricity, efficient transmission networks, cooling infrastructure and suitable land will increasingly influence the location of major AI facilities.
He identifies the Gulf region as a potential beneficiary of this transition, given its energy resources, access to capital and experience in developing large scale infrastructure.
However, electricity pricing alone may not determine competitiveness. Grid connectivity, construction timelines, energy storage and operational reliability could play equally important roles.
Capital Markets Could Support the Next Phase of AI Growth
Rattan also expects AI driven industrial development to create businesses requiring substantial long term financing.
Companies integrating computational systems with laboratories, specialised equipment and physical manufacturing may have capital requirements closer to those of industrial enterprises than traditional software companies.
As these businesses expand, public capital markets could provide an important financing route, allowing companies to fund infrastructure and enabling wider investor participation.
The development could also require investors to reconsider traditional sector classifications when evaluating emerging enterprises.
Rattan believes the next phase of AI led economic growth may increasingly depend on the ability to combine technological capability with physical infrastructure, reliable energy and access to finance.
About Terra Invest
Terra Invest (Terra Vision Investments LLC) is a global investment firm operating across AI, financial services, healthcare, green energy and infrastructure in India and the Middle East. The firm works at the intersection of capital, public policy, academia and governance, with offices in London, Dubai, Abu Dhabi, Miami and Singapore.
For more insights, visit https://terra-invest.com/insights.
