While updating my analysis for $MLKN (MillerKnoll; the largest office furniture company in the Western hemisphere), I was struck by the sharp rise in Information Processing Equipment and Software spending (dark blue line)—take a look at the first chart below. The most recent datapoint, highlighted by the yellow arrow, shows annualized sales reaching $250 billion.

The second chart, which tracks year-over-year changes, illustrates why I’ve included not only MillerKnoll’s sales but also two broader industry data series (including Office Furniture Manufacturing). Notice how the volatility in the blue lines closely mirrors the swings in MillerKnoll sales (in red), and even lines up with significant industry downturns reported by BIFMA (the Business and Institutional Furniture Manufacturers Association) in both 2001 and 2009.

Perhaps someday, Information Processing Equipment and Software spending will once again move in step with office furniture sales. For now, though, it seems primarily driven by today’s “AI arms race.” The latest year-over-year increase surpassed 41%—the highest on record for this data series. It’s also striking that if you adjust for inflation, this series remained at a similar level from the post-Internet 1.0 bust in 2002 up until early 2020. The dramatic surge started only after that point. It will be interesting to see in the coming years how sustainable (or not) this pace really is.