Goldman Sachs: Global AI investment will reach $200 billion in 2025

**Source:**Financial Association

Edit Zhou Ziyi

Goldman Sachs Economic Research reported on Tuesday (August 1) that global investment in artificial intelligence (AI) is increasing rapidly, which may eventually be reflected in GDP to a greater extent. It is estimated that by 2025, the global investment in AI may reach about 200 billion US dollars.

Goldman Sachs economists Joseph Briggs and Devesh Kodnani wrote in a team report that generative artificial intelligence (AIGC) has enormous economic potential, and within 10 years of widespread use, it could potentially increase global labor productivity by 100% per year. Improve by more than 1 percentage point**.

According to Briggs and Kodnani, to achieve a large-scale transformation to AI, enterprises will need to make substantial upfront investments in physical, digital and human capital to acquire and implement new technologies and reshape business processes.

Promoting the economy

AI-related investments are climbing from a relatively low starting point and could take several years to have a significant impact on the economy, the two economists wrote. According to Goldman Sachs, the United States is currently positioned as the market leader in AI technology and started relatively early in AI investment. In addition, China, which is leading in the field of AI, will also play a role.

Goldman Sachs estimates that By 2025, AI investment may approach $100 billion in the United States and $200 billion globally. Briggs and Kodnani write that, “despite the extremely rapid growth, the short-term impact on GDP is likely to be rather limited given the very low share of AI-related investment in U.S. and global GDP currently.”

While the timing of the AI investment cycle is difficult to predict, business surveys suggest that it is likely to have an investment impact in the second half of the decade (after 2025), while large players in information, science and technology professional services Companies will adopt AI earlier.

In the long run, if the economic growth predicted by Goldman Sachs AI is fully realized, AI-related investment may reach 2.5-4% of GDP in the United States.

Interest has been added

While it will take time for AI to improve productivity, interest in AI has grown rapidly, with more than 16% of companies in the Russell 3000 index mentioning the technology on earnings calls**, compared to 2016 This proportion is less than 1%.

About half of the increase in the graph above occurred after the release of ChatGPT in Q4 2022.

The report also notes that AI investment is expected to focus on four key areas: companies that train and develop AI models, companies that provide the infrastructure (such as data centers) to run AI applications, and companies that develop software to run AI applications companies, and enterprise end users who pay for these software and cloud infrastructure services**.

Goldman Sachs economists noted that “while AI investment so far has been focused on model development, generative AI may require a larger hardware and software push to scale.”