Investment in Artificial Intelligence (AI) is growing rapidly and has the potential to have a greater impact on U.S. gross domestic product (GDP) than the discovery of electricity or the advent of personal computers, according to a report by Goldman Sachs. Economists Joseph Briggs and Devesh Kodnani stated in the report that generative AI has enormous economic potential and could increase global labor productivity by more than 1 percentage point per year in the decade following widespread usage.

However, to achieve such a transformation, businesses will need to make significant investments in physical, digital, and human capital to acquire and implement new technologies, as well as reshape their business processes. The report suggests that global investments in AI could reach around $200 billion by 2025, with these investments happening before major gains in productivity are driven by adoption and efficiency gains.

In the long term, AI investment could peak at 2.5% to 4% of U.S. GDP, and 1.5% to 2.5% of other leading AI nations. Currently, AI-related investment accounts for a relatively low share of both U.S. and global GDP. The analysts note that while investment has primarily focused on model development, a substantial increase in hardware and software is necessary for generative AI to scale.

Goldman Sachs predicts that AI adoption will likely start significantly impacting the U.S. economy between 2025 and 2030. This projected growth in AI investment and adoption hints at the immense potential this technology holds for shaping various industries and driving future economic growth.

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