Rethinking AI Expenditures: Investments in Capital Assets, Not Traditional Tangible Assets

This study challenges the traditional classification of AI expenditures. It posits that these expenditures should be considered investments in capital assets. Unlike traditional tangible assets, AI systems generate long-term service flows that directly enhance production capabilities. Therefore, evaluating AI expenditures based on criteria designed for long-term tangible asset spending is not appropriate. This research highlights the need for a new framework that recognizes the unique nature of AI investments and their impact on long-term productivity.