Economists from Goldman Sachs have forecasted that investment in artificial intelligence (AI) could contribute up to 4% of the United States’ gross domestic product (GDP) by 2025. They predict that AI could attract $200 billion in global investments by that time, with half of it being in the U.S.

Goldman Sachs economists Joseph Briggs and Devesh Kodnani compared the potential financial impact of AI to that of electricity and personal computers in the past. While the introduction of these technologies led to a 2% GDP growth, the economists believe AI could have an even greater impact, accounting for up to 4% of U.S. GDP and 2.5% in other nations that have already heavily invested in the technology.

Generative AI, which refers to AI models that can create content, was identified as a significant contributor to the expected gains. Goldman Sachs emphasized the economic potential of generative AI, stating that it could increase global labor productivity by over 1% per year following widespread usage.

However, this economic benefit would require significant upfront investments from businesses. Goldman Sachs noted that in order for large-scale transformation to occur, businesses must invest in physical, digital, and human capital to acquire and implement new technologies and reshape their processes.

The report also highlighted the growing adoption of AI by companies, with 16% of Russell 3000 companies mentioning AI in their earnings calls. This figure is a substantial increase from less than 1% in 2016, positioning the U.S. as a market leader in AI technology.

While the exact timing of the AI investment cycle is uncertain, current business surveys suggest that the most significant investment impact of AI will occur after 2025.

The post AI Investment Predicted to Account for 4% of U.S. GDP by 2025 appeared first on TS2 SPACE.