AI-related investment is climbing from a relatively low starting point and will likely take a few years to have a major impact on the economy, Briggs and Kodnani write. The U.S., meanwhile, is positioned as the market leader in AI technology, and American companies will likely be relatively early adopters, according to Goldman Sachs Research. While a similar effect could also play out in other AI leaders (such as China), the investment impact will likely be smaller and more delayed.
Over the longer-term, AI-related investment could peak as high as 2.5 to 4% of GDP in the U.S. and 1.5 to 2.5% of GDP in other major AI leaders, if Goldman Sachs Research’s AI growth projections are fully realized.
While the timing of the AI investment cycle is hard to predict, business surveys suggest that it’s likely to start having an investment impact in the second half of this decade, with earlier adoption by larger firms in information and professional, scientific, and technical services.
And even though it will take time for AI to boost productivity, market interest in AI has already increased rapidly, with more than 16% of companies in the Russell 3000 mentioning the technology on earnings calls, up from less than just 1% of those firms in 2016. Roughly half of that spike came after the release of ChatGPT in the fourth quarter of 2022. Our economists’ previous research has shown that such mentions tend to predict increases in company-level capital spending.
