Investment in artificial intelligence is growing rapidly and could have a bigger impact on US gross domestic product (GDP) than the discovery of electricity or the advent of personal computers, Goldman Sachs (GS) said in a report on Tuesday.
“
Generative AI
has tremendous economic potential and could raise global labor productivity by more than 1 percentage point per year for a decade after widespread use,” write economists Joseph Briggs and Devesh Kodnani.
For such a massive transformation to take place, businesses will need to make “significant upfront investments in physical, digital and human capital to acquire and adopt new technologies and change business processes,” the report says.These investments could reach about $200 billion globally by 2025 and are likely to occur before “adoption and efficiency gains start to lead to significant productivity gains,” the bank said in a statement.In the long term, investment in AI could peak at 2.5-4% of US GDP and 1.5-2.5% of other AI leaders, the note said.
“Despite this extremely fast growth, the impact on GDP in the short term is likely to be quite modest given that AI-related investment currently makes up a very low share of US and global GDP,” the analysts wrote, adding that while investment has so far been focused on model development, “scaling generative AI will require significantly more investment in hardware and software.”
The introduction of AI is likely to begin to have a significant impact on the US economy sometime between 2025 and 2030, the report adds.